Unruly contractor asking for more payment

[Leida Rodriguez]

I started a half-million dollar complex renovation project for a rental property about a year ago with a 5 month deadline. Contractor was on the hook for a daily charge if not complete by 5 months, but the city dragged on approving some of the plans for 7 months. That made the idea of a charge to the contractor for delay difficult to justify, and the contract is silent about factors outside of the contractor's control or issues like approvals, which are naturally the owner's responsibility. I was on the hook for furnishing the finishes, which I brought in slowly throughout all these months, but I’m 100% complete as of a week ago.

I argue that the contractor hasn't waited for any finishes from me because I was keeping well ahead of his need for them, but he argues that not having all the finish materials in place is too disruptive so it forces him to go slowly. I believe that to be an excuse for juggling jobs, which must have been his plan all along. At this point, it's been 3 months since all approvals were finalized (although its been 11 months since general construction was approved), but we are only 75% complete. Contractor is likely dragging the project due to perceived low profit margin, which he often complains about.

He is swapping the planned materials, and HVAC machinery to lower costs without my agreement. He is also shopping for sub contractors for too long and leaves total only one or two of his low level workers un-supervised with no foreman 80% of the time. Another disturbing thing is he is also asking for payments beyond the actual progress as per the architect's judgement. We agreed on contract for the architect to assess progress for payment but he ignores the architect and simply invoices me directly. We have paid up 80%, which is the 75% completion (architect's assessment) plus $30K working capital. At this point the remainder left to pay is 20%, which is 10% contractor labor and another 10% of materials and cost of plumber. So, only 10% contains remaining profit for the contractor, while the rest remaining are pure costs. We worry he will take any additional payment, not perform the work, not purchase materials, and not pay plumber (who can tie up our project permits). We have concerns to prepay any further as we suspect that he keeps taking the working capital and uses it to finance his other projects instead of buying the equipment and paying plumber. He currently has stopped work until he gets further payment as he has done several times before. We already paid ahead. So, he has no reason to stop work. Should we stop further payment and ask him to front the last 10% of contractor labor cost himself, with us paying the other 10% for materials and plumber? What else can we do to get the contractor to finish this quickly? Our architect supports us withholding the last 10% of payment, stating it’s customary. We welcome any suggestions. Does anyone think a lawyer can do something to help?