Customer Dispute Resolution Is Excellent Customer Service (Part One): By Rick Feeley (Copyrighted Material)

(This article was published in the August 2012 issue of Remodeling Magazine as a By Law column under the title: “You Know You Need It: Customer Dispute Resolution”

Excellent Customer Service is the cornerstone of any Remodeler’s success. However, many companies make the mistake of only measuring the “excellence” of their Customer Service in terms of jobs that go “right”. As a result, they are not prepared to efficiently and effectively deal with those jobs that, for whatever reason, fail to live up to either the Customer’s or the company’s expectations.  Failure to actually anticipate Customer issues and build effective dispute resolution processes into the company’s standard operations can result in costly litigation and ruin your company’s Customer Service reputation. One bad kitchen can take out a neighborhood of potential Customers; one bad Customer law suit can ruin your company’s reputation in the community. Effective dispute resolution begins long before a dispute actually occurs, and effective dispute resolution is a keystone of Excellent Customer Service.

Remodeling is construction. Construction is a less than perfect art because there are so many moving parts that can cause any project to go bad: products don’t always arrive on time or arrive broken or defective; unexpected and unforeseen conditions on the site can create dramatic changes to the scope of work and schedule; workers get sick and/or subs don’t perform as expected.  And as a Remodeler, you are not only trying to manage all of these moving parts, you are dealing with a completely subjective Customer view of the work. One Customer’s worst thing that has ever happened to them is the next Customer’s normal construction mess. Whenever you are working in a Customer’s home, the emotions are close to the surface and anything that might go wrong is magnified in their eyes. Thus, it only makes sense that you have a plan in place for those jobs that don’t go entirely right. And building this plan into your operations will both assure prompt resolution of issues that may arise and will likely reduce the chances of disputes, or at a minimum the severity of disputes in your operations.

A major national home improvement company’s post project Customer Service surveys determined that Customers that had issues during their projects that were efficiently and effectively resolved actually gave the company better satisfaction scores than Customers who experienced no issues whatsoever during their projects. Taking its cue from these results, the company focused its efforts to build effective dispute resolution training and processes to assure consistent and efficient resolution of Customer issues. These efforts resulted in a measurable reduction in Customer complaints and litigation nationwide. This successful dispute resolution program focused on three essential components:  basic understanding of the dynamics of consumer construction related disputes; establishment of an operations plan dedicated to the prompt and efficient resolution of Customer issues; and a firm understanding of the two competing dynamics in most Customer issues: completing the project and effectively dealing with a demand for compensation. This article provides the basic understanding of the dynamics of Customer disputes. In the following two articles to be published in the coming months, we will provide an overview how to build an effective dispute resolution function in your business and tips on how to effectively handle a claim for compensation.

 In sum, it is good business for you to build a Customer dispute resolution process into your operations before you have a problem. Hopefully you will never need it, but, like that flashlight you keep in the drawer in the kitchen, it sure is nice to have it charged up and working when that unexpected storm comes in.

(Attorney Rick Feeley is President of Feeley Mediation & Business Law, a specialty law firm providing dispute resolution and business legal solutions to remodeling companies:

Customer Dispute Resolution Is Excellent Customer Service (Part Two): By Rick Feeley (Copyrighted Material)

(This article was published in the September 2012 issue of Remodeling Magazine as a By Law column under the title: “Resolution Solution: A Clear Process Integrated Into Your Operations Is Key”

In the first article in this series we established that an essential component of a Remodeler’s excellent Customer Service reputation is determined by the prompt and efficient process the Remodeler has in place to effectively resolve Customer issues. This article will provide some suggestions on how to build that effective resolution process into your business operations. The keys to that process are dedicated staffing, effective communication, systematic documentation, and reasonable expectations.

Dedicated Staffing.  The Remodeler should establish a single point of contact for the Customer that has the personality, patience and authority to resolve the Customer dispute.  A specific team member (or members) should be designated to be responsible to handle Customer issues. This “resolution specialist” must have problem solving training and a personality that allows them to objectively analyze issues and quickly build plans to efficiently resolve them. Too many times team members (and even owners) become defensive or look to take sides when a dispute arises. Effective problem resolvers take neutral positions and look not at where blame might lie, but focus instead on understanding the problem and building the plan to resolve it. Thus, a key component to successful dispute resolution is identifying, training, and empowering specific resolution specialists that will manage this function for the Remodeling company.

Effective Communications.  The Remodeler’s resolution specialist should be identified to field workers and subcontractors with direction that it is essential that when problems arise they be immediately brought to the resolution specialist’s attention. Hidden problems only get worse. When a problem is identified, the resolution specialist should immediately contact the Customer and inform them that they are the Remodeler’s one point of contact for the resolution of the issues. The resolution specialist should allow the Customer a reasonable opportunity to vent their frustration and then make it clear that the resolution specialist is going to build a plan to resolve the issue. The resolution specialist should establish a clear communication plan with the Customer, and follow up with calls and updates throughout the process. 

Systematic documentation. Unfortunately, any Customer problem could ultimately result in litigation. Therefore, effective utilization by the resolution specialist of the Company’s notes system, contractual change orders and punch lists is essential both for the systematic and consistent resolution of disputes and to build the record the Company might need to defend a potential law suit. Remember the first rule of construction litigation: “If it ain’t written, it didn’t happen.” Therefore, build consistent documentation into your dispute resolution process.

Set reasonable expectations. Customer disputes too often arise from unrealistic expectations that may actually be the result of the Remodeler’s sales process. No one likes to talk about potential problems up front. Thus, it is essential that when problems arise the dedicated resolution specialist builds plans to resolve issues that are clear and doable. That doable plan must be promptly communicated to the Customer and the company must then do what it says it is going to do when you say you are going to do it.  If the Customer demands “compensation” for the issue, keep the project moving while discussions on compensation proceed. The concluding article in this series will focus on effectively dealing with the “compensation” issue.

(Attorney Rick Feeley is President of Feeley Mediation & Business Law, a specialty law firm providing dispute resolution and business legal solutions to remodeling companies:


Customer Dispute Resolution Is Excellent Customer Service (Part 3): By Rick Feeley (Copyrighted Material)

(This article was published in the October 2012 issue of Remodeling Magazine as a By Law column


The first two articles in this series established the need for and some recommended steps to build the prompt and efficient processes to effectively resolve Customer issues. This article provides suggestions on how to manage complex Customer disputes which include a claim or demand for “compensation”.

At the outset, it is important to note that the demand for “compensation” discussed here does not include a claim for property damage or personal injury arising out of your work on a Customer site. Any situation that includes property damage or personal injury requires notification to your general liability insurance carrier and directives from the insurer as to how to address and resolve those issues. At subject here are those instances where the project has not proceeded as contracted and the Customer demands both the resolution of the underlying issue and the completion of the project and compensation in the form of a discount from the contract price or actual payment for inconvenience caused by the alleged project failure.

As previously discussed, you should not delay the project further by stopping work while compensation discussions proceed. It is essential that a realistic plan be built and followed to resolve the actual project issues despite the fact that the parties may be in a dispute as to compensation. It is recommended that any compensation not be paid until the project is complete. Too often, Remodelers pay compensation before the project is complete only to find they are asked for additional compensation once the work is done.

There are unfortunately numerous types of issues that might entitle the Customer to compensation. For example, a Customer might be due out-of-pocket expenses (rent, storage, out-of-home meals) incurred as a result of project delays. A Customer might be due lost wages or business opportunities if there has been a significant amount of time away from the job due to project delays or if the Customer is actually unable to conduct an in-home business. The first key to resolving a compensation demand is to not immediately deny or agree to any portion of it. Instead, allow the Customer to make his demand and then carefully review it and determine exactly what compensation might actually be due. It is very helpful to ask the Customer to write down his demand and to provide documented proof of the expenses sought. Quite often the “million dollar” kitchen demand is drastically reduced when the Customer is asked to actually provide a written request for compensation with supporting documents.

It is possible that lawyers will either be involved or threatened during the compensation discussion. The threat of a lawyer should not stop work or cease discussions between you and the Customer. In addition, there is no reason that you cannot speak to a Customer’s lawyer in regard to what is going to be done to complete the project. If the lawyer pushes on the “compensation” issue, it may be best to refer those discussions to (or at least consult with) your business attorney for the best response. Your lawyer can assist you with determining what portions of a compensation demand may be legitimate and potentially recoverable by the Customer.

Finally, when and if compensation is paid, it should be paid in conjunction with the signing of a simple release agreement. Paying compensation claims without obtaining a release may actually fund the Customer’s law suit to seek additional compensation.

In sum, the keys to working through a compensation claim: keep the job moving and document all steps towards completion; do not immediately accept or deny the Customer’s claim; ask the Customer to provide a written demand (or “request”) for compensation with documented support; carefully evaluate the claim and determine what items of compensation might be justified; only pay a compensation claim in exchange for a written release agreement; and, finally, never pay a compensation demand before the project is complete.

Efficient processes for handling this type of claim will actually enhance your company’s Customer Service reputation. Again, effective Customer dispute resolution processes are Good Business.

 (Attorney Rick Feeley is President of Feeley Mediation & Business Law, a specialty law firm providing dispute resolution and business legal solutions to remodeling companies:

ByLaw: Criminal Background Screening Is Good Business     

By Rick Feeley (Copyrighted Material)

(This article was published in the July 2012 issue of Remodeling Magazine as a By Law column under the title: “Background Noise: Screening Potential Employees is Wise, But Consistency is Key”. ).

Big box retailers routinely require criminal background checking of all employees and subcontract workers who perform installation and remodeling services on their Customers’ properties. Thus, the Remodeler who wants to participate in or compete with those big-box services should be willing to provide the same assurance to its Customers. Criminal background checks make good sense from both a safety and liability perspective. Providing those assurances to your potential Customers is an excellent marketing tool that shows that your company is willing to go that extra step to protect your Customers’ homes and families.[1]

With the clear benefits of back-grounding workers, there are some cautions that need to be addressed. Inadequate screening can result in missed criminal histories; inconsistent screening can create civil liability for your company; and being overly involved in the screening of your subcontractors and their workers can result in your company facing liability as a co-employer. Thus, along with the expense that criminal background screening adds to your bottom line, you must carefully and consistently carry out your background program to assure you don’t unwittingly expose your company to additional liability.

Careful choosing of a criminal background screening company is essential to the process. Like anything else, you get what you pay for, and it is important to choose a reputable company with the wherewithal to provide you with accurate information and a consistent program. In addition, trying to save expense by only having your provider do national as opposed to local screening may not provide you with the information you need. Local convictions may not appear in national data bases. Your screening company needs to have the ability to do both national and local searches.

Once you have set the parameters with your screening company as to which crimes will disqualify a worker from your program, you and your company should not be involved in the process of approving or disqualifying particular workers. If you second guess the screening to decide if any particular individual may have had extenuating circumstances underlying a conviction or whether any particular felony might have not been “that bad of a felony”, your program ceases to be a “consistent” program managed the same for every individual who submits to it. As to employees, an inconsistently applied program could result in liability for you for prejudicial practices in the workplace. As to your subcontractor workers, your direct involvement in any decision as to the severity of any particular crime could be a showing of “control” that could result (along with other evidence of “control”) in your being deemed an “employer” of those individuals. Thus, the best way to manage your program is to set the parameters with your third party screening company and then only allow them to provide you information as to whether any particular individual (employee or contract worker) passed or failed within those parameters.

A thorough and consistent criminal background program can give you a leg up on your competition and be well worth the additional expense to your operation. (Rick Feeley is the President of Feeley Mediation & Business Law.

 [1] This article focuses on the advantageousness of only allowing properly screened workers to enter and work upon your Customers residential properties. In so focusing, no opinion is made as to whether you may or may not want to hire workers with criminal backgrounds to perform off-Customer-site tasks; a decision that is a business risk decision to be made by any company pursuant to the facts and circumstances presented.

ByLaw: Change Order? Get It in Writing

(Copyrighted Material by Richard Feeley) (Article Published in Remodeling Magazine February 2012 Issue (

In a construction lawsuit the court cannot consider promises outside the scope of the parties’ written contract unless there is a written document signed by the parties altering the terms of that contract.

Construction attorneys simplify this rule: “If it ain’t written, it didn’t happen.” This rule can hurt the remodeler’s ability to defend a customer’s claim for project delay or the remodeler’s claim seeking payment for additional work.

The fix: Use customer contracts that define a simple change order process for unforeseen conditions and alterations of the scope, price, and/or time of the project; and diligently follow that change order process during the project.

Change orders are not just for additional money. They are created if the customer wants to add to the project or change materials or take a vacation or if the remodeler finds, say, water-damaged base cabinets or inadequate subflooring that will require additional labor and materials.

In short, if there is anything that occurs during the course of the project that alters the scope, price, and/or time of the project, prepare a change order and have the customer sign it. It is even good practice to have the customer sign a change order when the remodeler provides additional goods or services at no cost as a customer accommodation during the project.

None of us likes to think about potential claims when we’re starting a project. The fact is, however, they regularly occur. Adherence to a simple contract change-order process not only assists the remodeler in defending or prosecuting a claim, it can quite often help avoid a potential claim in the first place as the parties’ have a written record of changes to the scope, price, and time of the project when those changes occur.

When unplanned changes occur during the course of the job, have a contract change-order process in hand to assure smooth processing of those changes to avoid future disputes. Remember, if it’s written, it did happen.

—Attorney Richard Feeley is president of Feeley Mediation & Business Law, providing legal solutions and dispute resolution services to residential builders and remodelers.

Three Days Grace (Copyrighted Material by Richard Feeley) (Article Published in Remodeling Magazine December 2011 Issue (

THE MOST IMPORTANT required notifications in your client contracts are the customer’s right to cancel the job within three days of signing and the fact that the transaction is creating a lien interest against their property. Failure to provide those notifications or honor that right could subject you to penalties years after the job is actually completed.

Both the Federal Truth In Lending regulations and State Home Solicitation and Home Improvement Acts–created to counteract unscrupulous 1950s and 60s era siding salesmen–require consumer contracts to provide a three-day cancellation right and a notification to the consumer that the transaction itself is creating a security interest against their residential property. The notification of the three-day cooling off period and lien interest must be provided with specific language in the customer contract.

While it clearly makes good business sense to provide the necessary three-day right and lien disclosures and to not provide any goods and/or services to the site within the three-day notice period, there are times when the customer actually needs those goods and/or services within those three days. In an “emergency”, federal and most state acts provide that the consumer can waive the three-day right of rescission pursuant to a very clear process which includes the consumer providing the contractor a dated written statement that describes the emergency and specifically modifies or waives the right to rescind.

It is essential for the remodeler to assure that customer contracts meet all federal, state, and local notification requirements, including those discussed here. While there are several national companies that advertise compliant residential building and/or remodeling contracts, it is suggested that the remodeler partner with his business attorney to assure that any contract meets all contract requirements, including those required by the acts discussed.

Attorney Richard Feeley is president of Feeley Mediation & Business Law, a specialty law firm providing legal solutions for residential builders and remodelers.

Setting Expectations      (Copyrighted Material by Richard W. Feeley) (This article was published in the October 2011 issue of Remodeling Magazine (                                            

 There is one crucial component of the remodeling transaction that can do more to lessen the possibility and severity of disputes than any efforts designed to clean up disputes once they have occurred: Be sure to build “reasonable expectations” into your sales and remodeling process.

Customers have visions of completed projects, but not the stress and disruptions that are a part of the remodeling process. While it is certainly important to sell clients on the beauty and desirability of the finished project, it is equally important to fully inform the client as to the not-too-pretty aspects of the process necessary to reach that end.

Remodeling is a traumatic experience for the client. It’s dirty, it’s messy, stuff is late or doesn’t always fit; and things may be discovered that no one saw coming. And unfortunately, the level of stress the customer may experience is entirely subjective. What is normal construction mess to one person is another person’s worst nightmare.

Fully inform the potential client about the challenges inherent in the process at the same time you are selling them on the finished project. It’s also important for you to build steps into your process that enable the customer to see that you and your team are addressing the items that might cause the homeowner stress.

Carefully handle their furniture and belongings; clean up every day; show up on time; keep the promises you make. Set reasonable schedules that allow for the possibility of product delays – no one ever complains about getting their job completed too soon. And throughout the process, keep the customer fully informed of what is happening in their home and with their project.

Build the concept of reasonable expectations into your sales and remodeling process the likelihood and severity of disputes is greatly lessened. In sum, setting reasonable expectations for your clients is good business.

(Attorney Rick Feeley is President of Feeley Mediation & Business Law, a specialty law firm providing cost effective, Brand protective mediation and strategic legal solutions to residential builders and remodelers. )

A version of this article was published under the title “Within Limits” in the July 2011 issue of Remodeling Magazine (available for on-line viewing at


Rick Feeley (copyrighted material).

 Whether you are a job-at-a-time remodeler doing large renovation projects or a volume contractor doing multiple kitchen or bath remodels simultaneously, you likely are using subcontractors to do all or a portion of the work on your jobs. As a General Contractor your Brand reputation depends on your company taking responsibility for everything that happens on your job sites, good and bad. This is your obligation under your contract with the Consumer, and under the law. However, there are protections that you can build into the process so that the ultimate responsibility for your subs’ negligence or faulty workmanship is shouldered by them. Those protections must be built into your subcontracts.

Big hospital and office building projects utilize a cascading contract structure that assures protections down the line from the Owner-General Contractor contract to the sub-subcontractors on the site. The Owner/General Contract defines the indemnity and insurance obligations owed by the General to the Owner (basically for everything that happens on the job).   In the subcontracts, the General requires the subs to cover the indemnity and insurance obligations the General has promised to the Owner for the subs’ work on the project. The sub-subcontractors promise those same things to the subs, and down the line. If the project is damaged or delayed as a result of a sub-subcontractor’s negligence or faulty work, the Owner does not have to chase down the sub-subcontractor for relief; he needs only to go to the General. The General then goes to the sub for the relief he provided to the Owner, and the sub goes after that sub-subcontractor to fulfill his obligations.

Your projects are the exact same as the big hospital or office building project on a different scale. As the General Contractor, you are responsible for everything on the job as defined by your General Contract with the Consumer. That contract should define your obligations and the limits of your responsibility in regard to unforeseen conditions, code and easement variances, and damages or delays caused by the owner or other contractors hired by the owner. That contract defines the limits of your indemnity and insurance obligations to the Owner, but it should never try to shift those obligations from you to your subcontractors (any attempt to do so is not only bad business, it would likely be thrown out by a court). Basically, your General Contract provides that you are responsible for anything that happens on the job site as a result of your and your subcontractors actions.

While it’s good for your Brand reputation to accept your responsibility for everything that happens on the job site in your contract with your Consumer, you can protect your company from actually shouldering all that responsibility by obligating your subcontractors to indemnify and insure your company for any of their actions on the site. In sum, your Consumer should know that you are going to step up and take care of them and their home. And your subs should know that you are going to hold them responsible for everything that they do on your job sites. Good subcontracting is good business.

Attorney Rick Feeley is a Panel Mediator for the American Arbitration Association and President of Feeley Mediation & Business Law, a specialty law firm providing strategic legal solutions to residential remodelers ( ).

Comply to Thrive

 Having the government involved in your remodeling business can slow your growth, waste financial and personnel resources, and damage your company’s reputation. Unfortunately, many remodeling companies unwittingly invite government scrutiny by failing to assure they have a sound compliance structure in place. It’s simple: If you want government out of your business, build compliance into your operations and create partnerships with regulators. Too many remodelers fall into a trap on this one.

The regulations that govern the remodeling industry have two specific purposes: protecting consumers and collecting revenue. Most consumer protection remodeling regulations were established to protect folks from the old aluminum siding scams prevalent in the 1950s and ’60s. The result was a series of regulations that were hard to comply with and no better than what reputable remodelers were using anyway. Be that as it may, the remodeling company that ignores compliance does so at its peril.

Get Strategic

Those of you reading this have worked hard to build a brand; to build a solid reputation in your community for good workmanship and professional habits. Many of you have grown to cover multiple locations and even multiple states. Yet it is remarkable that many (if not most) growth remodeling companies do not include a strategic approach to regulatory compliance in their business plans. Unfortunately, the bigger your company gets, the more visible you are to regulators; and the more visible you are, the more dangerous and expensive non-compliance can be.

Healthy Relationship

In simplest terms, if you want government to stay out of your business:

1. Make sure that compliance is an integral part of your business planning.

2. Dedicate resources (money and people) to ensure that your operations are compliant.

3. Take the effort to meet and know your regulators before you get in trouble.

The remodeler who treats compliance and the people charged with enforcement respectfully and cooperatively will be rewarded with a healthy relationship with the regulators. It’s one more way you build the kind of brand reputation you need to be successful in the communities you serve.

—Attorney Richard Feeley is a Panel Mediator for the American Arbitration Association and President of Feeley Mediation & Business Law, providing strategic legal solutions to residential remodelers.

Mediation Is Good Business   (This article was published in Remodeling Magazine, February 2011 ( )

Rick Feeley

Copyrighted RWFeeley 2010                                                                                                                             

Mediation is the most cost effective, Brand protective manner of dispute resolution for the residential remodeler. Including a mediation clause in your customer contract is not only good business, it is good customer service.

Mediation is a process where parties submit their dispute to a third party trained to facilitate a resolution of the conflict. Unlike litigation or arbitration where a third party decides which party should “win” the dispute based on a showing of who is to “blame” for the problem, the mediator works with the parties to determine how they can work together to come to an agreement on a fair resolution of their dispute. Mediation is a private proceeding; all discussions with the mediator are confidential and the mediator cannot be forced to testify as to things he or she heard in the mediation. Mediation is both time and cost efficient: a law suit can easily take over a year to reach trial; mediation can result in a settlement in most instances in one day. Litigation is an extremely expensive process; mediation is an informal proceeding where even if the lawyers are involved, their work is much more streamlined and cost efficient. Thus, mediation is both cost effective and Brand protective.

Including a mediation clause in your standard customer remodeling contract protects both you and your customer. Remodeling is construction: it’s stressful, it’s noisy; it’s dirty; materials don’t always come in on time; stuff breaks; and no one knows for sure what is behind those old walls or under those old cabinets. Thus, the opportunity for a dispute to arise during a remodeling project is far greater than in a simple sale of a product to a customer. Since disputes are inherently possible in the work that you do, your customers will appreciate the fact that you have a fair and cost efficient manner to resolve them built into your contract.

A basic mediation clause states that before any formal lawsuit is filed, the parties agree that the dispute will be submitted to a formal mediation proceeding. It may make good business sense to have a formal arbitration clause attached to the mediation clause that says the parties agree that any issues not resolved by the mediation will be submitted to a binding arbitration instead of a formal court case. Your residential remodeling business lawyer can help you decide which type of dispute resolution clause works best for your particular business model. At a minimum, however, mediation should be the first step as most disputes will resolve at mediation.

Mediation is good business.  It is a cost effective, Brand protective way to build your business and satisfy your existing customers.

Attorney Rick Feeley is the President of Feeley Mediation and Business Law LLC, an Atlanta based specialty law firm providing mediation and strategic business legal solutions to the home builder and remodeler. (

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