Can I Withhold Payments to a Contractor Who Doesn't Finish the Job?

by Rob Jennings J.D. ; Updated July 27, 2017
Don't pay a contractor who hasn't finished the job.

Any home building or renovation project can be stressful, but it can become even more so when the contractor stops working. Not only are you left standing without the money you've already paid him, but you have a great big wasteland where your kitchen or bathroom used to be. Although you may be willing to pay just to get the project finished, think twice before paying a contractor in full before he finishes the job.

Unexpected Complications

Sometimes a contractor discovers complicating factors after starting work that weren't obvious at the start; you have structural problems with the house, the termites have eaten your subfloor, and so on. If something major pops up that the contractor couldn't have known about when he quoted the job, he can't be held to the original contract price. Still, avoid paying him in full before he finishes. If he has been doing what he agreed to do all along, offer to pay half of the increase now and the rest upon completion of the work.

No Complications

The case may arise that your contractor demands more money but can't give you a credible reason. If no hidden complications have popped up to increase the contractor's costs on the job, demanding more money before he finishes may be a sign that he's having financial trouble, which means that if you eventually have to sue him, you might recover nothing. Alternatively, he may have misquoted the job -- perhaps because he has never done one like yours before and didn't realize it until work was already underway. In either case, don't throw good money after bad. Get a reputable contractor to give you a price on finishing the job.

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Substance Abuse

While many contractors run their own business because they want to, occasionally you run across one who works for himself because he's so addicted to drugs or alcohol that he can't hold down a regular job. If your contractor seems under-equipped for the project, frequently shows up late or leaves early, you may have hired an addict. People with a substance abuse problem will take on any project to get money to support their habit, even if it's a job they don't actually know how to do. If you suspect you've been had by an addict, quit paying him and get a professional to finish the work.

Liens

Don't feel bad about withholding full payment until the work is completed; contractors don't need to worry about having to chase their money as much as you do. Your state's statute books probably contain a chapter on mechanics' or materialmen's liens. These statutes give a contractor who furnishes labor or materials to improve your property a lien on that property for the value of that labor and those materials. If you don't pay your contractor, he can force a sale of your property to recover his money -- provided he's actually entitled to it. You, on the other hand, have no such security against a contractor who takes your money and disappears.

About the Author

A practicing attorney since 2003, Rob Jennings has written fiction and nonfiction since 2005, with his work appearing in a variety of print and online publications. He earned his Juris Doctor from the University of North Carolina at Chapel Hill.

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