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Updated over 8 years ago, 08/06/2016
When general contractors stopped working, what should I do
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!
Sorry to hear about your difficulties. Couple of quick things.....
1. Licensing - I am licensed in CA and don't know Maryland BUT - the state consumer affairs office takes complaints against licenses VERY seriously and that is an option for you. Laying out a string case with documentation and it kinda sounding like since you are knew to the game;;;:: he may be purposefully trying to "work you" because of your inexperience.
Also re licensing - here there are strict guidelines contractors must follow concerning acceptance of payment prior to the rendering of services. Contractors will many times accept or take "draws" against the project for work that has not been compelled performed. Again, I don't know Maryland.....
2. Surety Bond - in CA ALL contractors must have such a bond and you can file a claim against his bond.
*** Doing either of the above in CA would get the contractors attention quickly. As the consumer; you are protected and the contractor state licensing board is hard on contractors when they try and mistreat consumers. Again, this is CA and I don't know Maryland...???
3. Come to Jesus Talk - I don't know the conversations you have had with him/her, but it's time to be very clear and forceful about their lack of performance and possible poor estimating and diligence in performing per contract details (don't know what they are, but you get the drift! ---- MESSING WITH MY MONEY IS LIKE MESSING WITH MY EMOTIONS!!)
4. Attorney - check and see what the would cost for an attorney to write a letter on your behalf re your intent to sue re breach of contract and yada yada yada,,, misleading professional quotes,,, and whatever else they can put together.
From state to state things vary,,,,, I am primarily investing in Texas right now and other than a few trades, ANYBODY can be a contractor or perform various types of construction work. This was complete culture shock to me! Here, if it's not Plumbing, electrical or HVAC, anybody can do whatever. These trades must be licensed. Any other trades you haves problem with you simply have to sue in court.
If I were you, I would do so research and get schooled up on the ins and outs of contractor licensing in your state and use the responsible agencies to help you if possible.
Lastly- trying to to be too lengthy, you can fire him (in writing) citing cause for such action and hire another contractor to finish the job since you are essentially losing money everyday. --- then sue him for whatever he has been paid fur and not finished.
Hope some of this helps!
Normally I'd suggest filing a complaint with MHIC - but if you're looking for speedy result, you may want to sit down with the contractor and work out a plan.
Typing on my iPhone --- sorry for all the grammar mistakes!!
Originally posted by @Rob Harris:
Sorry to hear about your difficulties. Couple of quick things.....
1. Licensing - I am licensed in CA and don't know Maryland BUT - the state consumer affairs office takes complaints against licenses VERY seriously and that is an option for you. Laying out a string case with documentation and it kinda sounding like since you are knew to the game;;;:: he may be purposefully trying to "work you" because of your inexperience.
Also re licensing - here there are strict guidelines contractors must follow concerning acceptance of payment prior to the rendering of services. Contractors will many times accept or take "draws" against the project for work that has not been compelled performed. Again, I don't know Maryland.....
2. Surety Bond - in CA ALL contractors must have such a bond and you can file a claim against his bond.
*** Doing either of the above in CA would get the contractors attention quickly. As the consumer; you are protected and the contractor state licensing board is hard on contractors when they try and mistreat consumers. Again, this is CA and I don't know Maryland...???
3. Come to Jesus Talk - I don't know the conversations you have had with him/her, but it's time to be very clear and forceful about their lack of performance and possible poor estimating and diligence in performing per contract details (don't know what they are, but you get the drift! ---- MESSING WITH MY MONEY IS LIKE MESSING WITH MY EMOTIONS!!)
4. Attorney - check and see what the would cost for an attorney to write a letter on your behalf re your intent to sue re breach of contract and yada yada yada,,, misleading professional quotes,,, and whatever else they can put together.
From state to state things vary,,,,, I am primarily investing in Texas right now and other than a few trades, ANYBODY can be a contractor or perform various types of construction work. This was complete culture shock to me! Here, if it's not Plumbing, electrical or HVAC, anybody can do whatever. These trades must be licensed. Any other trades you haves problem with you simply have to sue in court.
If I were you, I would do so research and get schooled up on the ins and outs of contractor licensing in your state and use the responsible agencies to help you if possible.
Lastly- trying to to be too lengthy, you can fire him (in writing) citing cause for such action and hire another contractor to finish the job since you are essentially losing money everyday. --- then sue him for whatever he has been paid fur and not finished.
Hope some of this helps!
Thanks for the very helpful info! The first two may work for me; I'll look into them.
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!
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.
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
Did the Contractor pull permits at the Building Department for the work done to date?
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!
Jingmin Zhang
Oooooohhhhhh, forgot something BIG!!
I hope you got his insurance info. That's a very viable avenue (filing a claim) for circumstances like this.
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.