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Renovations are expensive and stressful. The average renovation budget these days is close to $20,000, but even a modest bathroom reno is a major investment for most of us. But money is just one reason home improvement projects cause us stress—the other is the contractors we hire.

Somehow, despite checking licensure, bonding, and a robust network of reviews and recommendations, hiring a contractor to work on your house often feels like rolling the cosmic dice. Sometimes you get an amazing professional who dazzles with their skill and never deviates from expectations—someone who always shows up and leaves the site cleaner than when they arrived. Sometimes, however, you get what appears to be a sociopath who acts like you’re paying them to not finish the project.

It really can’t be overstated: The only immediate leverage you have with a contractor is money. But it can be difficult to judge when to use the nuclear option and stop paying them, especially if they’re still doing work and making incremental progress.

Reasons to stop payment

Assuming you signed a contract that includes a reasonable down payment on the work and a clear payment schedule tied to project milestones (you did do this, right?), there should be no surprises. When the contractor finishes a specific step, you release a percentage of the total cost of the project, and your contractor moves on to the next step.

When that orderly progression is disrupted, the money is your main tool to ensure things get back on track. Here’s when to withhold payment:

  • Surprise requests. If your contractor suddenly asks for more cash so they can purchase materials or pay subcontractors, it’s never a good idea to comply. As noted by former contractor Tim Carter, reputable contractors should never need to pay for materials up-front with their suppliers, and they don’t pay their subcontractors in advance, either. Requests like this indicate they either accepted a low down payment and are now trying to stealthily change the terms, or they’re not very good at business and need cash to keep things moving. Either way, it’s time to insist that they reach the next milestone before you pay anything more.

  • Delayed start. You signed a contract and paid out a down payment. Months later, nothing’s been done, or only a minimal amount of work. If the deposit you paid your contractor was large—50% or more—your contractor may be suffering a lack of motivation, since they’ve already made their profit without lifting a finger. You might need to take other steps, but at a bare minimum, refuse to pay any further scheduled payments unless they get back on track.

  • Vanishing act. Related to delayed starts is the fun of having your contractor vanish on you for long periods of time. If you go days or weeks without hearing a peep from them and then they suddenly show up at random moments, withholding money is going to be your most effective tool for insisting they stick to a schedule. If they request additional payments every time they show up to do a little work, you should definitely withhold payment, as that’s probably their main motivation for turning up at all.

  • Inflated costs. Part of what you’re paying a contractor for is their expertise in the field, which should include knowing how much materials and labor will cost. While there can always be surprises, if everything in your project starts turning out to be more expensive than you were originally quoted it’s time to halt payment at least temporarily and have a conversation with your contractor about revising estimates and maybe securing concessions from them; it’s not your fault they don’t know how to estimate costs properly.

    Remember: It’s not your responsibility to ensure your contractor makes a profit on your job—they should have quoted you accurately to begin with.

  • Shoddy work. It might seem obvious, but it’s crucial that if the work being done is not at the standard you expect, your only recourse is to refuse to pay for it until it’s fixed. Even if your contractor seems reasonable and agreeable and promises to make the fixes, don’t pay them another penny until those fixes have been implemented.

  • The end. Finally, when negotiating the contract at the beginning, make sure you have a “hold back” final payment that isn’t released until everything is 100% finished—inspected, signed off on, punch-listed, and cleaned up. This will be your final bit of leverage to ensure there are no issues that your contractor promises to get around to, someday. Don’t make that payment until you’re absolutely certain the work is done and you’re happy with it.

Considerations before withholding payment

When withholding payment from a contractor, it’s important to keep a few things in mind:

  • Make sure you understand the contract. Contracts protect both parties, so don’t focus solely on what your contractor is required to do for you—make sure you understand what you’re agreeing to, as well. If you withhold payment, understand the contractual mechanisms your contractor might have to force the issue, which might involve a lien on your house.

  • Be prepared. If things get really bad and you decide the best course of action is to withhold all the money and fire your contractor, do your due diligence first. Read the contract to understand the precise termination process outlined there, but also inspect the work done and note everything that remains to be finished. Then get rough quotes on what that will cost you. You might not be able to claw back any money you’ve already paid to the original contractor, so simply firing them might just let them walk away while you wind up paying twice for the work.

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