How To Spot a Bad Contractor Before It’s Too Late – Part 1

Everything you need to know about bad contractors, how to avoid them, and what to do if you’re stuck with one

Although people aren’t always fully aware, hiring a general contractor to renovate your home is a daunting and risky endeavor.  The process of renovating seems reasonably straightforward: just decide what you want to do, get a few bids from some local contractors, choose your favorite, and get started.

Unfortunately, it’s rarely that smooth and easy… that’s why over 50% of homeowners report having negative experiences with their remodel or issues with a bad contractor.

Here at GreatBuildz, a free service that connects homeowners in Los Angeles, Orange County, Ventura or San Diego with reliable general contractors, we speak to homeowners every day who want to get connected with honest, reliable pros to ensure they don’t get stuck with a bad contractor and have a nightmare remodel. There are many, many ways that you can end up in a contractor dispute – here are some tips and guidelines to help you avoid one, or find ways to solve issues that have arisen with a bad contractor.

If you haven’t already hired a contractor, there are a few very important steps you can take upfront to help ensure you won’t end up with a bad contractor who you might need to fire down the road. I suggest you read my blog article about what steps to take to ensure you find a great contractor.

The most important few steps include checking the contractor’s license at the state board, validating they have all necessary forms of insurance, checking their online ratings/reviews, and calling their references. If you want to be even more thorough to alleviate the likelihood of a contractor dispute, check out the ten vetting steps GreatBuildz performs when researching our potential contractors. Additionally, before you hire a contractor and start your project, there are some secrets you should know about working with contractors and tips to help you have a positive renovation experience. We will touch more on this in our 5th chapter of this ‘Bad Contractors’ series.

The Homeowner / Contractor Knowledge Imbalance

There is one topic that most people don’t think about when preparing to hire a renovation contractor. They don’t realize the inherent imbalance in the contractor/client relationship.  I call this a knowledge imbalance since the contractor knows a ton about construction, while the client often knows very little.  This disparity can easily allow a dishonest contractor to “pull the wool over the eyes” of a client about costs, quality, materials, etc. and the client has no way of knowing it.

Because of a homeowner’s limited knowledge of construction, they can’t know if the contractor’s work is performed in a quality manner with quality materials. Also, unfortunately, a client often has limited options for recourse if a contractor does poor work, doesn’t finish the job, or just acts unethically. One option for closing this knowledge gap is to get assistance from someone that knows construction. Be it a project manager, owner’s representative, retired contractor, or home inspector, any of these folks are well versed in construction and can be great resources. If you reach a point with your contractor when you feel like you are being deceived, etc., it might be worthwhile to spend a few hundred dollars to get some help and guidance from an unbiased professional. 

If you’re interested in learning more about all the facets of the contractor/homeowner relationship and how best to work with contractors, please check out chapter 5 of this series: 8 Secrets About Working With Contractors

How To Spot a Bad Contractor Before It's Too Late - Part 1 1

If you’re unfortunately already stuck with a bad contractor and are frustrated with your experience, it’s likely that you are undergoing one of the four most common contractor issues:  extra costs, project delays, bad workmanship, or poor communication (or a combination of these).

  1. Extra Costs: Sometimes, bad contractors will submit a low bid for a project expressly with the intent of winning the job and ‘making up the profit’ with change orders (extra costs), which is infuriating to clients.  If a homeowner is in the middle of a project and the contractor requires a change order to continue the work, the homeowner has very little leverage to negotiate a reasonable price.  If the contractor provides a price that the client thinks is outrageous, the client’s only option is to halt the project and bring in someone cheaper to perform that task, which is typically an unrealistic course of action. In a few weeks, keep an eye out for the next chapter in this series, where I’ll touch on how to deal with a bad contractor who is asking for unreasonable extra charges.
  2.  Project Delays: Some amount of delay is inevitable, and homeowners should expect that, but bad contractors will take on too many jobs simultaneously knowing full well this will cause one or more of those jobs to suffer project delays.  Some contractors don’t manage their crews correctly or they get stretched too thin and will pull workers off one job to work on another; which will often severely delay one client’s project. Next week, check out the next chapter of this series about what to do if you’re having a contractor problem that revolves around project delays, including samples of a warning letter you can send to your contractor.
  3. Poor Work: This issue is less straightforward because the idea of a ‘quality’ finished product can vary between the client and the contractor.  Some contractors will notice shoddy work, be it part of their work or an existing condition, but say nothing to the client in hopes they won’t notice.  Then, at the end of the job, the client notices this poor workmanship, but now it’s complicated to address because the job is completed.  Alternatively, a contractor might use materials that happen to be on the ‘back of their truck’, regardless of whether they are the right part for the job or even used/damaged.
  4. Poor Communication: Like the rest of us, contractors are busy with their business, family, etc. and can’t always respond to all clients immediately. That being said, some bad contractors seem to put absolutely no priority on communicating with their clients.  They don’t keep clients updated on the progress of the job and are unresponsive to clients’ calls, texts, and emails.  Probably the most infuriating of these four issues, it makes the homeowner feel like the contractor has a lack of respect for their time, project, contract, and the substantial amount of money the client is spending.
  5. If you continue to have the same issue with your contractor, you might consider sending them a ‘warning letter’ which reiterates your issues and expectations and gives them notice about the remedies you plan to pursue if this isn’t corrected.

Related: Contractor’s Poor Workmanship: How to Deal with it

Nope, It’s Time To Fire My Contractor

If you’ve decided that your bad contractor is ruining your life, you don’t want them in your house anymore, and you have to fire your contractor, there are a few steps you should take.

First, you have to carefully read over the contract you signed with them and see if there is any language about termination, etc. If you’re concerned with the legal and financial repercussions of firing a contractor, you may want to consider speaking with a construction attorney. When it comes to actually terminating the contractor, you’ll often find that the contractor is probably willing to terminate the job too (considering the issues you’ve had between the two of you).  The conflict will usually involve how much money the contractor is owed for the work completed to date. The contractor will probably want to get paid more than you think is reasonable, but it’s important that you negotiate and finalize this amount, even if it’s more than you think is fair.

Unfortunately, if you withhold payment, you run the risk of having the contractor sue you or file a Mechanic’s Lien on your property, both of which will cause you many headaches in the foreseeable future. Finally, when you reach an agreement and pay the contractor their final payment, make sure to get something in writing that indicates you both agree to terminating the contract and that the contractor is now paid in full. Seek the assistance of an attorney if you want to ensure this is done in a fully legal manner. You can find more info about reasons to fire you contractor here: When To Fire Your Remodeling Contractor

How To Spot a Bad Contractor Before It's Too Late - Part 1 2

If your contractor quit or stopped showing up to the job, or if you’ve completed your project but are unsatisfied with the results, you have several potential ways to get ‘revenge’ on a bad contractor.  Keep in mind, none of them are going to be quick, easy, or painless, so sometimes the best course of action is to just take your lumps and learn from your experience.

The first and simplest thing you can do is write a bad review on one or more websites like Yelp or BBB. It won’t solve any issues, but it might make you feel better and can disuade future potential clients from making the same mistakes. If you feel like your property was damaged or the contractor did shoddy work, you can file a claim with their Surety Bond. This will be a long and involved process and you may or may not ever get payment.

Alternatively, you can report a contractor to the state contractor licensing board. Depending on the state, their staff might help you try to mediate a resolution with the contractor

Finally, you can sue a contractor in either small claims court or superior court, depending on the amount of your claim.

If you’re in the middle of a renovation project and are having some frustrations with your contractor, rest assured that you are not alone.  However, common frustrations don’t necessarily mean you have a bad contractor. Remodeling your home requires a high level of patience and tolerance.

  • You need to be realistic that your remodel won’t be perfect and that it will cost more and take longer than expected. So, if your costs or schedule has increased by 10-20% from the original budget, that is probably within the normal range of construction.  However, if your job is costing considerably more or taking considerably longer, you may have hired a bad contractor.
  • To determine whether your expectations of your contractor are appropriate or too high, keep an eye out for my upcoming blog post about understanding and managing a general contractor that will be out in a few weeks.

Check out the other parts of this series to learn how to spot a bad contractor before it’s too late:

Part 1 –  How to Spot a Bad Contractor Before It’s Too late

Part 2 – Dealing with Contractor Delays

Part 3 – Contractor’s Poor Workmanship: How You Can Deal With It

Part 4 – How To Deal With Contractors Overcharging You

Part 5 – 8 Secrets About Working With Contractors

When it comes to finding a reputable contractor for your project – GreatBuildz is simplifying the contractor search. GreatBuildz is a free service that connects homeowners in Los Angeles, Orange County, Ventura or San Diego with reliable, thoroughly screened general contractors and provides project support from start to finish. Call now (818.317.3567) to chat with a real person about your next renovation project or visit our website for more information:

What is GreatBuildz? We Make It Easy To Find a Great Contractor

Hi, we're Paul and Jon - Co-Founders of GreatBuildz. We believe everyone deserves to find a great contractor, have a stress-free renovation, and enjoy their beautiful new space. There are so many contractors out there and it's often hard to tell the good from the bad... until it's too late. We started our company to help simplify your contractor search and help you have a stress-free renovation experience. We're always available to help, no matter where you are in the process. Click here to learn more about our story.

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