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While we would like to think all remodeling projects can be completed without conflict or disagreement, no one can realistically promise this. Problems do arise, and disputes become a reality.

Written by NARI Staff

Do you have a dispute resolution clause in your contract?

A dispute resolution clause is a written understanding between you and the other party specifying what happens in the case of a disagreement. It sets out the process by which the parties intend to resolve any disputes which may arise out of their contract.

Not having a dispute resolution clause allows the first party to act typically through “litigation in a court of competent jurisdiction.” This can lead to attorney expense and multiple court dates adding up more time, money and possible project delays.

As a benefit of NARI Milwaukee membership, NARI Milwaukee has a “Disagreement Resolution Procedure” which assists you and your customer (the homeowner) in solving differences. The goal is to resolve concerns in a timely manner utilizing mediation, or if necessary, binding arbitration saving the parties countless hours and potentially thousands of dollars on attorneys.

In Short –The “Disagreement Resolution Procedure

During your remodeling project, if you reach a disagreement with your customer, the first step is to try to talk it out.  Recognizing a home improvement or renovation is a stressful period for the homeowner, keeping emotions at bay and focusing on the factual points of the matter help advance resolution.  If the matter is truly a mistake the contract made it is best to acknowledge and correct it. 

If conversations reach a stalemate refer the homeowner to the Wisconsin “Right to Cure Law.” You should be providing this document to your customer along with your contract. Proof of Right to Cure must be provided before any third party can intervein.  If this does not resolve the concerns, you may start the NARI Milwaukee “Disagreement Resolution Procedure” by simply calling the NARI Milwaukee office at 414-771-4071 for a consultation and more information, applicable fees and obtain the most current Disagreement Resolution packet to be completed. Sometimes, all it takes is a third party to intercede to get these differences settled. In the initial stages, conversations are handled by a NARI Milwaukee staff member.

If simple third-party conversation cannot resolve the problem, then it is necessary for a formal written list of construction outcome concerns to be filed at the NARI Milwaukee office including all written contracts and documentation for review by the Bylaws and Ethics Committee. NARI Milwaukee will not address any matters involving non-NARI members or related to collection or price.  Your concerns then go through a review process and a volunteer Ethics Committee mediator is assigned to the case who has subject matter expertise in the areas of concern. Depending on the situation, a mediator and/or other parties may review the documentation and inspect the project personally. The mediator will try to resolve the situation between you and the homeowner. If the concerns are unable to be resolved through mediation, binding arbitration would then be conducted to resolve the dispute.

Binding arbitration is performed by the NARI Milwaukee Bylaws and Ethics Committee with a professional third-party arbitrator in a hearing format where both parties are present. An agreement is signed by both parties agreeing to abide by the Arbitration decision. In most cases, after a decision is rendered, the matter is then closed.

Wisconsin Statutes chapter 788 Arbitration reflects the “sensible policy … to promote arbitration as a viable and valuable form of alternative dispute resolution. If the terms of a dispute resolution clause are sufficiently clear and create an enforceable obligation requiring the parties to engage in a staged approach to resolve a dispute, the courts will enforce the terms the parties agreed when they executed the contract. NARI Milwaukee will provide you a Dispute Resolution clause for your contract to meet this requirement.

Success Story

Does it work? In short, YES! In May, a consumer contacted the NARI office to discuss a disagreement with a NARI member contractor over a roofing project that had been completed the prior August.

They had attempted Right to Cure, but some negative online reviews created tension and posturing between the two parties and resolution was going nowhere. The consumer was not satisfied that the entire roof was not re-decked, attic trusses in homeowners’ opinion were not sprayed thoroughly for mold remediation; insufficient ventilation installed and insufficient ridge vent.

Recently, NARI Milwaukee sent a volunteer roofing subject matter expert to the project site to meet with the homeowner and contractor, see the project and attempt to mediate the matter. Although both parties came the meeting with continued posturing and their position in mind, the mediator was able to calm the parties to be open to reason. Through conversation the parties became comfortable that the process was being handled fairly. All the points of contention were inspected, discussed, reasoned and a settlement agreement between the parties was drafted on the spot and signed by both parties.

The consumer immediately removed the negative online reviews and the contractor agreed to replace a section of decking, do additional mold remediation in that area and add some additional ventilation.

Both parties spent $600 for this mediation service. The contractor and customer spent ten months trying to resolve this situation on their own. It took the team from NARI less than three months to dig into the matter and mediation was able to completely resolve the conflict within one day.

The NARI Milwaukee “Disagreement Resolution Process” as part of the contract was a great service to the contractor and consumer. Alone, the parties were at a stalemate for months. It took a third party coming in as a voice of reason to bring the two parties together to settle. Without the NARI Milwaukee Dispute Resolution clause in the contract, these parties were headed to litigation.

The NARI Milwaukee membership investment saved a contractor time and thousands of dollars of personal attorney fees and possible consumer court fees and double damages through the court system.

Let’s ask the question again, what’s in your contract?

Can you afford to not be a NARI Milwaukee member and have the Disagreement Resolution clause in your contract?

Contact the NARI Milwaukee office for
your Dispute Resolution clause today
Call us on 414-7714071

Not a member?
Join our community today!

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