What to do if a contractor takes your money and runs

Contractor holds wood beams
Adobe

It was a chilly night last year when a fire ripped through Crystal Stewart’s home, leaving her family’s house destroyed, all their possessions gone.

“It’s hard to see this,” she said, looking over the foundation. “Your whole life, everything you have saved . . . is gone.”

But that pain worsened after she hired a contractor based on a local charity’s recommendation.

“He sounded great on the phone, so I hired him to rebuild my house,” she said.

Stewart says she paid the contractor $125,000 in insurance money so she could rebuild her home.

But she says weeks went by, then months, and no one laid as much as a single board on top of her foundation.

“He didn’t file for the permits,” she said. “He never reached out to the HOA, he’s got $125,000 of my money, and it’s gone.”

With the help of a local attorney, she’s now suing him for breach of contract, hoping to recover some losses.

How to avoid problems

So how can you avoid a contractor nightmare like Stewart’s?

The Better Business Bureau says it is important to get every detail in writing, including a timetable for when the work should be done.

The contract should also state what happens if dates aren’t met.

The BBB’s Sarah Wetzel said: “You want to have what the contractor would be able to offer you. Do you get a refund? Are they going to find somebody else, or is that on you?”

Wetzel says before signing that contract:

  • Get quotes from at least three contractors.
  • Check the BBB website for complaints and reviews.

Wetzel says if the price seems very look, be careful.

“The lowest bid may not always be the best,” she said “They may be cutting corners, so really make sure you’re even reviewing every bid that you get.”

Another red flag: Asking for the full payment upfront.

Instead, the BBB suggests paying:

  • One-third at the start of the project.
  • One-third halfway through
  • The final third is when the work is complete.

We tried to track down the contractor, but a family member referred us to his attorney.

He told us in a statement, “He is not a fly-by-nighter. He had supply issues and questions about the contract and the HOA’s rules. But he has a willingness to make things right.

Stewart is now renting until she can recover some of her rebuilding money.

“I want my money back,” she said.

She wants others to hear her story, and know the warning signs of a bad deal, so you don’t waste your money.

About the Author

John Matarese

John's goal is to help as many TV viewers as possible save money, avoid bad deals, know a rip-off when one comes their way, and be educated consumers. His informative weekly consumer segment "Don't Waste Your Money" now airs on 45 TV stations from San Diego to Tampa to Houston and Cincinnati. More.

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