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Kip Tips

How to Resolve a Dispute With a Home Contractor

Advice on what to do when the work you paid for didn't get completed.

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I paid a local contractor for work he never finished. How can I get my money back?

Start by gathering records of the payments you made, and document all your efforts to get in touch with the contractor, including keeping track of phone calls and e-mails. All of the paperwork you keep, even if unofficial, can serve as evidence in a dispute, says Ilona Bray, senior legal editor for Nolo.com.

See Also: What You Need to Know About Hiring a Contractor

Next, write a letter laying out your requirements and your deadline for meeting them, and let the contractor know that you'll take legal action if your demands aren't met. That should get his attention. If not, find out where the contractor is licensed (check with state, county or city agencies), and submit a complaint to the appropriate office. Many agencies will step in to investigate and mediate a dispute, and some state agencies have funds to reimburse consumers who are left high and dry.

Your state attorney general's office or consumer protection agency may be able to assist you if the contractor doesn't fall under the umbrella of a licensing board. If you signed a contract with an arbitration clause, you may have to settle the issue with a third party (possibly the licensing agency) outside the legal system. And even if you can take the case to court, the court may ask that you try to solve the issue through mediation before seeing a judge.

You can file your claim in small-claims court if the disputed amount doesn't exceed the state limit (typically $3,000 to $15,000). If a larger amount is involved, you'll have to hire an attorney and pursue your claim in a higher court—and the fees can add up.

No matter what the venue, you may be hard-pressed to collect if the contractor disappears or has no money with which to reimburse you, although sometimes the court is able to tap an insurance policy or garnish the contractor's assets.

See Also: 6 Home Projects That Save Energy and Money