Even when you think you’ve hired the right contractor, your project can go wrong. But all is not lost, as long as the contractor was licensed. (You have next to no legal recourse against unlicensed contractors, and some jurisdictions even come after homeowners for hiring them.) Here are your options:
Stop paying
Many contractors ask for half of their payment upfront before they begin a job. That’s a bad idea. You should pay no more than one-third of the agreed-upon fee in advance; in some U.S. states, this is the law. After that, structure the contract so that you pay upon completion of specific chunks of the project. That way, if you reach an impasse over work that hasn’t been done correctly, or at all, you can withhold payment. Let’s hope the contractor will make things right to get his or her money.
Complain
Because you hired a licensed contractor, you can file a complaint with the government agency that licensed them. That body should then help settle your dispute. Because contractors fear losing their license, sometimes the mere threat of such a complaint will do the trick. You can also appeal to your county and/or state consumer protection offices for help. If you have multiple options, try them all and see who’s most responsive. These departments are a much better first step than hiring a lawyer, because their help is free.
Tap their bond
Contractors’ ads and signage often state "licensed, bonded and insured." That’s more than just a line; it’s an opportunity. If a bonded contractor abandons your job, damages your property, does shoddy work or fails to pay subcontractors who then come after you for money, look closely at the contractor’s bond. Chances are these transgressions are covered by it. Contact the company that issued the bond, usually an insurance company, and ask. Be prepared to prove your case.
Go to arbitration
If your contractor is at all slick or sophisticated, he may have included a mandatory arbitration clause in your contract. This is not all bad. Arbitration is less expensive than a lawsuit and is often so user-friendly that you won’t need a lawyer. A trained arbitrator will listen to both sides and issue a decision. Even if you are not required to go to arbitration, you may want to because it’s often quick and efficient. The Better Business Bureau is one organization that offers to arbitrate disputes between consumers and businesses for low or no fees.
Take it to court
If all else has failed and you must sue, check to see whether the amount of money you’re seeking falls below the small claims threshold in your area. Small claims court is structured so citizens can handle the process themselves. Your other legal alternative is to hire a lawyer to file a full-fledged civil case. Because lawyers are expensive, this is probably worth it only if yours was a large project and you suffered a significant monetary loss.
— The Washington Post
