Tax, SDIRAs & Cost Segregation
Market News & Data
General Info
Real Estate Strategies

Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal


Real Estate Classifieds
Reviews & Feedback
Updated about 6 years ago on . Most recent reply

How to Properly Fire a Contractor?
Hi all,
I hired a contractor to work on my 2nd flip. In the 2 months that he's been there, he's only completed the roof. He's still working on the framing (which should've been a 2 or 3 day job). He knocked down a bad wall over a month ago and has left it fully exposed since. So basically, he's done less than 2 weeks worth of work in 2 months and I don't see any improvement. With that said, I need to terminate his contract.
I essentially used the same contract as the one provided when you purchase ' The Book on Flipping Houses'. For the scope of work, I listed out all of the tasks that I needed completed and the payment schedule was similar if not the same as the one outlined in the template.
10% paid after Signing the Contract
20% paid after 2 weeks of work on the project
30% paid after half of the work has been completed
30% paid near the end of the project after a substantial amount of the project has been completed
10% paid after work has been completed
He received the first 2 payments and is no where near 50% complete. I'm drafting the termination letter now and was wondering if there's anything that I should consider? The contract says that I can terminate for any reason with notice. I'm planning on handing him a Mechanic's lien form. I suppose that when I hand him the letter and take the keys, that'll be the end of that. I've reimbursed him for any material that he's purchased and since he's no where near 50% done, he's not due any more payments. I was planning on having the inspector check his work before the letter but he seems anxious to get to the electrical and plumbing work which I keep telling him to hold off on and don't want him taking it upon himself to start purchasing that material.
Most Popular Reply

@Matthew Paul The contract has an end date which is sometime during the end of March. I believe it was the last Monday of March. So he's 2 months into a 5 month project and is only now wrapping up the framing.
@Sam Shueh I called one of the contractors who I interviewed for this project and had them stop by. They saw what was done and said they'd be comfortable completing the job if necessary as long as an inspector came in to look at the work that was already done. They were concerned that parts of the framing wouldn't pass inspection. As far as finishing their mess, at this point, that would only be framing and picking up where they left off.