How to deal with a bad contractor

No one sets out to hire a bad contractor, but homeowners in the midst of remodeling or building projects do it every day. So what can you do if a contractor takes your money and runs or just fails to show up?

“Even my own sister said, well, you better call a lawyer,” said homeowner James Van Gorder. “This guy, I think he’s trying to scam you.”

James filed a complaint with Angie’s List when he says a company took his money upfront to do roof repairs, but never came back.

“Well that was $5,000 that they got from me, but they didn’t get that second check, thank God,” James said.

Whether you neglected to do your research before hiring, or even if you vetted every candidate, bad things can happen.

“No one likes to admit this, but sometimes you have to break up with the contractor,” said Angie’s List founder Angie Hicks. “If you find yourself in a bad situation it’s better to cut your losses. Start over with a new contractor and get it done right.”

Contractor Doug Lynch has finished many projects for homeowners who were left in a lurch. He says communication is key when starting over with a new contractor.

“Be transparent with that person that’s coming to look at it with exactly where you stand financially, where exactly you stand from a time constraint, what your desires and needs are for the completion of the project,” Lynch said.

So what can you do if you become a victim of a bad contractor? File a complaint with your local licensing agency and your state or local contractor’s board. If your contractor was bonded, the bond is a guarantee that the contractor will perform the services outlined in the contract, and if they fail to do so, you can report the problem and receive compensation. You can also seek legal action through small claims court or by hiring a private attorney.

“When we are hiring contractors to do projects around our house, a lot of times we may skimp on our research,” Hicks added. “Don’t hire the contractor that is not licensed, don’t hire the contractor that doesn’t carry proper insurance, because while those might seem like little shortcuts now, they could turn into big headaches down the road.”

Angie’s List says don’t hire a contractor based on price alone. To help protect yourself, don’t pay anything until you have a contract that spells out the payment structure. And never pay the full amount up front. Tie future payments to progress on the job and hold back at least 10 percent until the job is complete to your satisfaction.