When general contractors stopped working, what should I do

Question

Hi all,

I have a situation that I really need everyone's advice on. I bought a flip in Maryland a couple months ago and hired a licensed Maryland contractor for the reno. It was supposed to be completed at the end of May according to our contract and is now 2+ month late (due to under estimating the amount of work needed) and only about 60% complete. The project was to be $77k and we have paid him $60k already, which is a lot more than what the contract stipulates. The contractor has slowed down considerably on the project due to a "lack of funds". I hesitate to pay him anymore until I see more progress.

Has anyone had similar experiences? Any advice on how I can push the project forward?

Worst comes to worst, how easy is it to get some of my money back so I can hire someone else to finish the project?

Thanks in advance for any advice!

Ken Robinson · Answer

a couple of questions to ask yourself...

1. Did the contractor under estimate the work, or did both of you?

2. Have you received proportionate work for the money you have paid?? In other words, Do you know where the money went?

I see contractors under bid jobs every day in order to get work. They are able to get work because the consumer WANTS to believe the project will cost less, but it rarely does. I don't feel sorry for either party here as both are to blame. Usually a real cost was quoted and disregarded as too high.

If there was unforeseen work necessary to complete the job, this is really nobody's fault but a frequent occurrence in this business. A seasoned contractor will foresee many of these things, and will usually have allowances for such in his contingency costs which may have made his quote seem high.

My suggestion:

A reasonable and honest discussion about why you are over budget, where the money went, and how much it will take to complete would be my suggestion. The goal is "moving forward" not finger pointing. A good contractor wants to finish a project, but will not work for free. Reassurance that he will get paid for cost to complete by you, and then his acknowledgement you are over budget with concessions on profit/overages on cost over contract price would be a good start.

Good Luck!

Account Closed · Answer

@Jingmin Zhang

There are many clues as to whether a relationship with a new contractor will head south.

Not necessarily the first one; but avoidance of, resistance to, tiptoeing around the subject of pulling permits or steering you to pull the permit yourself for work  the contractor is supposed to do is a clue that you may be dealing with the wrong contractor.

If a contractor cannot simply go down to the building department without any urging from you and get a permit that they clearly post in public view on the job-site, things may be starting off on the wrong foot.

There may be exceptions to this but I will not get into that now. If a contractor starts singing a tune when the subject of permits comes up...BEWARE!

Account Closed · Answer

@Jingmin Zhang Forgot to tag you when I posted the question to you about pulling permits.

Account Closed · Answer

Did the Contractor pull permits at the Building Department for the work done to date?

Brian Pulaski · Answer

He missed the bid by $40,000. Did he spell out what he missed to be such a large amount? I would contact my attorney with his/your contract, his license and insurance info, and see what they say. It doesn't sound like he is going to take his $40,000 loss and finish it for the price he (or you) agreed to.

Rob Harris · Answer

Looks like he was running a game on you, in my humble opinion.  He either needs to perform and or you will have to sue him.  In CA, performing work unlicensed or while your license in suspended is a CRIME.  I am sure it is there too if a licensed was required for specific types of work,,, but agin, I don't live there.

Sorry you are getting "dirtied" up on this deal.  He knew what he was doing and that seems to be obvious.

Personally, I would calculate what is the best financial move for you to make.  If he has not performed to the tune of the money you have paid him then you also have legal cause in that manner.

He either needs to figure out a way to perform or face legal ramifications.  If he won't cooperate, get a new contractor in to finish the work BUT document WELL what was done with pictures and also what was not done.  Establishing a solid evidentiary case against him is paramount as he will deny anything you can't prove.  Might be a good idea before any other contractor comes in to have a Licensed Home Inspector come in and document as a 3rd party the condition of the home.

I really hope this doesn't hurt you too bad in the end.  Sounds like a lot of costly lessons learned.  I hd to learn them also,,, and still learning!

Side Note: I would record any and all contact with him that you can.  See if you can get him to admit failures on a covert digital recorder.... That is good evidence..... So during your next conversations and when you start talking legal moves, that would be a wise move.

Good luck and I am open to anything else you would like to inquire about.

My Best, Rob

Jingmin Zhang · Answer

Thanks for all the input. We sat down and had a thorough talk. We listed all the things left to be done, separated the labor from material cost, and figured out that 55k is needed to finish the project. That means he underestimated/over spent 40k.

Also, we just found out that his website is not working anymore and his MHIC license isn't in the database anymore (we checked 4 month ago and he was there).

We are not sure what to do at this point. Any advice would really help. Thanks.

Jingmin Zhang · Answer

Cool, I'll look into MHIC.

When general contractors stopped working, what should I do

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