Big issue with contractor on first flip. Can you help offer opinion for this situation?

[Chelsy C]

I am 3 month into my first flip. I encounter many issues.

Now, another issue. one of my independent contractor claimed that his workers get robbed at the property during rehab, and asked me paying back their lost which is about $700 cash. Also he claimed he has done much more than the contract state and spent much more time. He is demanding extra $1000 for it or he will fill a lien against the property.

I hope you can offer some help on this situation?

[J Scott]

My suggestions:

1. Learn your lesson -- have a strong contract, get proof of license and insurance, get references, don't pay ahead of work, get lien waivers if you don't trust the contractor, etc.

2. Have the contractor who was robbed file a police report immediately. If he refuses, it's probably safe to say that you aren't on the hook to reimburse him for any losses. If he does file a report, call your insurance company and see if they'll cover it. If not, call an attorney to determine your rights/responsibilities.

3. Offer to pay the contractor for the work that has been completed. If he's finished 50% of the work, offer to pay 50%. If 75%, offer to pay 75%. Try to get him to agree to accept reasonable compensation for work completed and then part ways. Find another contractor and see #1 above.