What to do when building your dream home becomes a nightmare: Navigating Washington’s contractor bond claim process.

Casey N. Kinross, Associate Attorney
Robert T. Wright, Partner

You’ve spent years saving to remodel your home. You find a contractor to help bring your vision to life. They work with you through the design phase and help you plan each and every detail to turn your starter home into your dream home. From the layout to the finishes, you know exactly how it will look.

Your contractor gives you an estimate for the work. You sign the contract, pay the deposit, and eagerly await the day your dream starts to take shape. Finally, the big day arrives, but the contractor doesn’t show up as scheduled. You send a text asking where they are. “Maybe they’re running late,” you think. After all, you did everything right. You spent hours researching and even followed these three tips to avoid getting burned by a contractor. So, you give them the benefit of the doubt.

But a few more hours go by, so you call the contractor. No answer. You send another text. Nothing. The next morning, you check your phone. No updates from your contractor, so you try calling again, only to hear the worst: “This number is no longer in service.” It hits you like a ton of bricks… you already paid your contractor for the work, and then you realize “you’re not getting your home remodeled anytime soon.”

These experiences are truly heartbreaking, and unfortunately, all too common. Construction disputes can arise for many reasons: delays, poor workmanship, defects, or outright abandonment.

So… What do you do now?

You’re entitled to the benefit of your bargain. Under Washington’s Contractor Registration Act (RCW 18.27), all licensed contractors must maintain a surety bond or another approved form of security as part of their registration requirements. These bonds act as a financial guarantee, ensuring contractors pay for labor, taxes, materials, and any judgments against them.

Washington recently increased bond requirements for the first time in two decades:

  • General contractors must now carry a bond of at least $30,000.00.
  • Specialty contractors must carry a bond of at least $15,000.00.

This is good news for homeowners, but recovering funds from a contractor’s bond isn’t automatic.

How to Recover Funds Through a Contractor’s Bond:

  1. Act Quickly: Bond claims operate on a first-come, first-served basis. If multiple homeowners file a claim and are awarded a judgment against the same contractor, the bond can run out and can be divided between the claimants.
  2. Identify the Bond – Verify the bond or security deposit status using the Department of Labor and Industries’ Contractor Lookup Tool. Verify a Contractor, Tradesperson or Business. You’ll need this information for your lawsuit.
  3. File a Lawsuit – To recover from the bond, you must file a lawsuit naming both the contractor and the company who issued the contractor’s bond.
    • File the Summons and Complaint: The Summons and Complaint must be served with the clerk of the appropriate superior court. Generally, the appropriate superior court is the superior court of the county in which the work was done (or in which the project was located if no work was performed). If you are a residential homeowner, keep in mind that you must file your complaint within two years from the date the work was substantially completed or abandoned, whichever occurred first.
    • Serve the Summons and Complaint: To serve the summons and complaint, you must send three copies of the summons and complaint along with the required fee to the Department of Labor and Industries by registered or certified mail (or other delivery service requiring notice of receipt). Service is not considered complete until the Department of Labor and Industries receives the required fee and three copies of the summons and complaint. L&I will then forward the summons and complaint to the contractor and the bond company.
  4. Track response deadlines: If the contractor or bond company fails to appear or answer the complaint in court within 20 days of the date of service, you can seek a default judgment to expedite your claim.
  5. Obtain a judgment: Once the court rules in your favor, the bond company must comply with the judgment and will typically tender the sum of the bond to satisfy your claim within a short period of time. If your judgment exceeds the amount of the bond, any excess recovery typically lies with the contractor. This can be tricky, because many contractors form corporate entities, like LLC’s or corporations, which may limit your ability to recover.

How can we help?

At WHC, we are here to guide you through this frustrating process. Navigating the legal system can feel overwhelming, especially when you’re dealing with an already stressful situation. We know the ins and outs of construction litigation and can help you explore all the possible recourse options available to homeowners who have been set back by a contractor.

We can:

  • Help you resolve disputes with your contractor before they even start.
  • Offer cost effective, yet sophisticated legal strategies to get your project back on track as quickly as possible.
  • Negotiate with contractors and/or their insurers to resolve the issue out of court.
  • Initiate litigation to recover bond funds and/or damages from your contractor, directly, if the situation necessitates.
  • Partner with engineers and construction experts to strengthen your case and gather the necessary evidence to prevail in court.

Remember, we are here to help, and the sooner you act, the better your chances of recovering from your loss. Contact us to learn how we can help you navigate Washington’s bond claim process and take the first step toward turning your nightmare back into a dream!