Contractor Issue- Need Advice How To Move Forward

[Heather Luu]

Our first investment property was affected by the December 2023 tornado outside of the Nashville area. Luckily, our insurance is covering our rent and utilities until January 2025. My fiance and I were able to find a contractor who was able to do all the work for the house. We did our research and the person we picked had great reviews. We paid him in installments and we're at our final stop of rebuilding our entire kitchen and finishing up small details like filling up nail holes, bathroom vanity installs and etc. After we paid him our next installment of $45K, he basically disappeared in July and after reaching out to him and his wife who also works with him, we've gotten minimal contact back/excuses/delays of when the final work is going to be done. It's been a couple months now and we're trying to figure out what to do as we are at the near end of our insurance coverage. Right now, I believe they're in Ashville, NC and that's why they haven't been as present in our area. They're based out in Georgia and it seems like they move from one storm to the next.

We've given this contractor about $255K, $45K of that being funded towards the next project of the kitchen and now we have about $60K left to finish the house. I would love some advice on what to do. File a Lien? Get a contractor law attorney? File him to the insurance board of TN? File them on BBB? Or take the $60K that we have to finish out the rest of the house and let them walk away with $45K? Or a combo of one of the followings I mentioned?

We have until the end of January 2025 before rent and utilities come out of our own pockets. I already met some new contractors who said can finish the work within the $60K budget, however, they did mentioned some things the contactor did wrong with our house that they would have to fix (leak in our roof from our chimney, new gate hinges because they put the wrong ones on there and other small things). Ideally, I would like the old contractor to finish/fix his work that they did but Im not sure if it's worth the hassle given our time constraints. If anyone has any advice that would be greatly appreciated. If there is any information that I missed, please let me know I can explain our situation further. 

[Luka Milicevic]

@Heather Luu

Welcome to the forums...

As a rule, the final installment always needs to be paid once work is complete. I realize it's too late for that now but if you run into that again in your career just know.

 I'll just be honest...you're in a very difficult spot and there isn't going to be a straight forward or easy way to recover your funds or get the work completed. 

This is not a rare occurrence - this story is old as time. 

The issue that most run into is actually finding the contractor once they vanish. I have had an investor on a window job pre pay 11k, contractor vanished, they sued, sheriff couldn't serve them because they couldn't find them.

From their perspective - they received their money, and if they are "storm chasers" East TN and NC have unlimited work right now. Your job is at the absolute bottom of their priority list...probably not even on their list. Even getting them back out there will be an uphill battle. 

If it was me....I'd request the $45k to be refunded and everyone walk away. See if you can settle on an amount less than that. 

The most likely outcome here....just speaking from experience. You will not get them to show up to complete the work, you will not recover your funds and you will have to move heaven and earth to make this "right" 

1-See if you can settle with the contractor

2-File complaints with the BBB (assuming they are registered), file a complaint with the state attorney general

3-Sue

I used to believe there was some sort of over arching justice in the world, but then I got into real estate and became friends with RE attorneys. I quickly realized people get screwed all the time and there's nothing they can do about it. 

I really do wish you the best of luck and very much hope this works out.