Contractor overages

[Ray S.]

I've been doing a rental property rehab. The contractor hasn't come close to meeting any of his target dates, and has gone over budget many times. What is the best way to keep him on track and hold him accountable for overages? In my experience withholding payments just keeps them from working, what else can I do? I do have a clause that he has to compensate me if he goes over, and he is at that point, but I know contractors will always try to get out of that, so I know I won't get that money back without a fight. 

Also, is there anyone I can hire, like a consultant, to bring in that could oversee his budget and see if his numbers for what he's charging are reasonable or not? And if they aren't, how do I renegotiate after he has already started? 

[Patrick Connell]

Ray Slater I read through this post and have seen a lot of good stuff coming from several people, but one thing keeps reappearing through this thread that I wholeheartedly disagree with; and that's you blaming the contractor for missing stuff.

The contractor didn't miss anything, YOU missed it, not him. We all have to start somewhere, but at the end of the day, this is your project, your money, your responsibility. Are there things he could have mentioned, sure, but those things should have been mentioned simply because you overlooked them, not because you didn't know to look for them yourself.

You got in over your head with the whole project, failed to vet the GC, and failed to understand the true scope of work needed to complete the project.

It sucks, hard lesson to learn, but man up, acknowledge its your responsibility, and move on.
You'll likely not make any money on this project, but education is expensive.