Legal Disclaimer: This article provides general information for educational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change frequently. For advice specific to your situation, consult a licensed attorney in your area.
You hired a contractor, paid them thousands of dollars, and now things have gone wrong. Maybe they disappeared mid-project. Maybe the work is shoddy. Maybe they're demanding more money than agreed. Whatever happened, you need your money back - and you have options. The FTC provides guidance on contractor disputes and your rights as a consumer.
Common Contractor Problems
- Abandonment: Contractor took deposit and never showed up, or started work and vanished
- Poor workmanship: Work doesn't meet industry standards or building codes
- Incomplete work: Project left unfinished despite full or partial payment
- Cost overruns: Final bill far exceeds original estimate without proper authorization
- Contract violations: Using different materials than specified, missing deadlines
- Permit issues: Work done without required permits, causing inspection failures
- Damage to property: Contractor caused damage they refuse to repair
Before You Do Anything
Document Everything
Your case is only as strong as your evidence. Gather:
- Original contract, estimates, and change orders
- All payment records (checks, credit card statements, receipts)
- Photos and videos of the work (or lack thereof)
- All text messages, emails, and voicemails
- Names and contact info of any witnesses
- Contractor's license number and business information
Get a Professional Assessment
Before claiming the work is defective, get an objective opinion:
- Hire another licensed contractor to inspect and provide a written assessment
- Get repair estimates from 2-3 contractors
- If structural issues exist, consider a licensed engineer
- Request a building inspection if code violations are suspected
Calculate Your Damages
You may be entitled to recover:
- Cost to complete: What it costs to finish the work they didn't do
- Cost to repair: Fixing defective work they already did
- Overpayment: Money paid minus value of acceptable work received
- Diminished value: If repairs can't fully fix the damage
- Consequential damages: Hotel costs, storage fees, etc. caused by delays
- Permit and inspection fees: If you have to redo unpermitted work
Keep all receipts: Every dollar you spend fixing the contractor's mistakes is potentially recoverable. Document everything.
Your Recovery Options
Option 1: Direct Negotiation
Sometimes a direct conversation works, especially if the contractor wants to protect their reputation. Present your documentation calmly and ask for a specific resolution.
Option 2: Demand Letter
A formal demand letter often gets results when casual requests fail. It shows you're serious and creates a paper trail for future legal action. Include:
- Specific problems with dates and details
- Amount you're demanding with calculations
- Relevant laws they violated
- Deadline to respond (usually 10-14 days)
- Statement that you'll pursue legal remedies if not resolved
Option 3: Contractor Licensing Board Complaint
Most states require contractor licensing. Filing a complaint with your state's licensing board can:
- Trigger an investigation
- Result in license suspension or revocation
- Access the contractor's bond for your recovery
- Create pressure for settlement
Unlicensed contractor? In many states, unlicensed contractors cannot enforce contracts or collect payment. You may be entitled to a full refund of everything you paid, regardless of work performed.
Option 4: Contractor Bond Claim
Licensed contractors typically must post a surety bond. If negotiations fail, you can file a claim against this bond. Contact your state licensing board to verify the contractor's bond and learn the claim process.
Option 5: Small Claims Court
For amounts within your state's small claims limit (typically $5,000-$25,000), small claims court is:
- Relatively fast (usually 30-60 days to hearing)
- Inexpensive (filing fees typically $30-100)
- No lawyer required
- Informal and designed for non-lawyers
Option 6: Regular Civil Court
For larger claims or complex cases, you may need to file in regular civil court. Consider consulting with a construction law attorney, especially if:
- Damages exceed small claims limits
- Multiple contractors or subcontractors are involved
- There are significant structural defects
- Insurance claims are involved
State Licensing Board Contacts
Find your state's contractor licensing board to verify licenses, file complaints, and access bond information:
- California: Contractors State License Board (CSLB)
- Texas: Texas Department of Licensing and Regulation
- Florida: Department of Business and Professional Regulation
- Arizona: Registrar of Contractors
- Nevada: Nevada State Contractors Board
Search "[Your State] contractor licensing board" to find yours.
What to Include in Your Demand Letter
- Contract summary: Date, scope of work, agreed price
- Payment history: How much you paid and when
- Problems encountered: Specific issues with dates
- Communication attempts: How you tried to resolve it
- Damages calculation: Exact amount with breakdown
- Legal basis: License law violations, breach of contract, consumer protection laws
- Deadline: Usually 10-14 days to respond
- Consequences: What happens if they don't pay
Protecting Yourself in the Future
Before Hiring
- Verify license status with your state board
- Check for complaints and disciplinary actions
- Get at least three written estimates
- Ask for references and actually call them
- Verify insurance (liability and workers' comp)
Contract Essentials
- Detailed scope of work - exactly what's included and excluded
- Material specifications - brands, grades, quantities
- Start and completion dates with consequences for delay
- Payment schedule tied to milestones, not dates
- Change order process - how modifications are approved and priced
- Warranty terms - what's covered and for how long
During the Project
- Never pay more than 10% upfront for materials
- Make progress payments only for completed work
- Document everything - photos, conversations, changes
- Get all changes in writing before work proceeds
- Withhold final payment until punch list is complete
Demand Your Money Back
Create a professional contractor dispute demand letter with state-specific legal citations.
Generate Your Letter