Hiring a Contractor and Handling a Construction Dispute: A Practical Guide

Summary. Two hours of screening, five contract terms, one habit during construction, and the right order when it goes wrong.

The two hours that prevent most of this

Nearly every construction disaster in this guide is a selection problem wearing a legal costume. The screening that prevents them takes about two hours and almost nobody does it.

1. Verify the license yourself. On the state board's website, not from a card. Check that it is current, that the classification covers this scope, that the name matches the name that will be on the contract, and that the disciplinary history is clean. Print the page.

2. Verify insurance directly with the insurer or agent. General liability and workers' compensation. Call the number on the certificate, do not just read it. Certificates handed over by contractors are sometimes expired and occasionally fabricated.

3. Verify the bond with the surety.

4. Get three itemized bids on one written scope. Write the scope yourself, or have the first bidder write it and give it to the other two. Bids on different scopes cannot be compared, which is frequently the point.

5. Call references — including one from a project two or more years old. Recent clients are pleased. Clients two years out know whether the work held and whether the warranty was honored.

6. Look at a current job site. Organized, protected, clean? That predicts more than any reference.

7. Search the court records in your county for the business name and the owner's name. Judgments, liens, and prior construction suits are public and take fifteen minutes.

8. Check the secretary of state. In good standing? Formed how recently? A new entity operated by someone with a long history is a pattern worth understanding.

Red flags, roughly in order of seriousness: door-to-door solicitation after a storm · a large cash deposit · "today only" pricing · a one-page contract · no license or a wrong classification · reluctance about insurance certificates · asking you to pull the permit as owner-builder · refusing lien waivers as a payment condition · a price far below the others · no physical address · pressure to sign before you have read it.

Part one: the bids

Write the scope before you get bids. Even a rough one. What is included, what is not, and what products you want by manufacturer and model where you know.

Ask each bidder to itemize: labor, materials, subcontracted trades, permits, dumpster and disposal, and their fee or markup.

Ask what is excluded. This is the question that saves the most money later. Common exclusions that become change orders: unforeseen conditions behind walls, structural repairs, electrical upgrades required by code, permit fees, disposal, patching and painting adjacent surfaces, and relocation of plumbing or HVAC.

Ask about allowances. Where materials are not yet selected, the bid carries an allowance — "$4,000 for cabinet hardware," "$9/sf for tile." Ask what the allowance actually buys, and go look. Low allowances make a bid look competitive and deliver the real cost later as overages.

Ask about the schedule — start date, expected duration, and whether they are running other jobs simultaneously.

Ask who will actually be on site — their own crew, or subcontractors, and which trades.

Be suspicious of the low bid. In residential construction, the low bid is often the bid that gets made whole through change orders. If one bid is far below the others, ask specifically what it excludes.

Part two: the contract

Check it against your state's statute

Most states have a home improvement contract statute with mandatory terms above a dollar threshold. Look it up and read your contract against it. A materially non-compliant contract is, in many states, unenforceable by the contractor or voidable by you, and in several states a violation is a per se unfair or deceptive act — which brings multiplied damages and attorney's fees.

That is not a technicality you invoke later. It is a reason to make sure the contract is compliant now, and a card you will hold if things go wrong.

The terms that decide how it goes

Scope, in detail. Not "remodel kitchen." A list of what is included, what is excluded, and products by manufacturer and model. Ambiguity in scope is where every change order fight starts.

Total price, with allowances identified and what each buys.

Payment schedule tied to milestones, not calendar dates. Payments should follow verifiable completed work: demolition complete · rough-in inspected and passed · drywall hung · cabinets set · substantial completion. Not "30% at signing, 30% at 30 days."

A modest deposit. Many states cap it. A demand for 30% or 50% up front is a warning.

Retainage — hold back 10% until the punch list is done. This is your only real leverage at the end of a project, and homeowners give it away constantly by paying in full when the work looks finished.

Change orders in writing, signed, priced, before the work. Include the sentence: "No change in scope or price shall be effective unless set out in a written change order signed by both parties before the work is performed."

Lien waivers as a condition of payment. Include: "Payment shall be made within seven days of receipt of a conditional lien waiver from Contractor and from each subcontractor and supplier who has served a preliminary notice." Then follow it, every time.

Permits pulled by the contractor, in the contractor's name.

Insurance — general liability and workers' compensation, with certificates you verify.

Warranty — what, how long, what is excluded.

Termination — what happens if either party wants out, with notice and an opportunity to cure.

Dispute resolution — read this before you sign. If it requires arbitration, ask what it costs. Arbitrator fees on a multi-day residential hearing can run $12,000 to $18,000, which makes a moderate claim uneconomical. Ask to strike it, or to carve out small claims, or to fix local venue, or to have the contractor advance the arbitrator's fees. Contractors who want the job frequently agree, because nobody has ever asked.

Your right to cancel

If you signed at your home or anywhere that is not the contractor's permanent place of business, the federal cooling-off rule gives you three business days to cancel, and the contractor must give you written notice of the right plus two copies of a cancellation form.

If they did not give you the notice, the clock did not start — which can leave the right alive for weeks or months.

Your state may provide a longer or broader right, and if the project is financed by a loan secured by your home, a separate rescission right applies — three days, extended to three years if disclosures were not properly given.

To cancel: in writing, by a method that proves the date, before the deadline. Keep a copy.

Part three: during construction

The one habit that matters most

Get a lien waiver every time you pay.

Your general contractor is not the only person who can lien your house. Subcontractors and suppliers you never hired can lien your property even if you paid the general contractor in full — which means you can pay twice.

The protection is waivers.

Conditional waiver when you pay by check — it becomes effective when the check clears, which protects both sides.
Unconditional waiver only where the payment has already cleared.
Progress waivers at each payment, covering work through a date.
Final waivers at the end, covering everything.

Get them from: the general contractor, and everyone who sent a preliminary notice, plus anyone you know is working on site.

Many states have statutory waiver forms. Use them.

The preliminary notices that look like junk mail

Early in the project, letters arrive from companies you have never heard of — a lumber yard, a cabinet supplier, an electrical subcontractor — with a title like "Notice to Owner," "Preliminary Notice," or "Notice of Furnishing."

They are not solicitations. Do not throw them away.

In many states, serving one is a precondition to lien rights. Which means the stack of notices on your counter is exactly the list of people who can lien your house — and exactly the list of people you need waivers from.

Keep every one in a folder. Make a list. Check it against your waivers at every payment.

Permits and inspections

The contractor should pull the permit, in the contractor's name. If they ask you to pull it as an owner-builder, ask why — it shifts code responsibility to you and sometimes means they cannot pull one.

Keep the permit card, every inspection sign-off, and the final certificate. Unpermitted work surfaces years later, at sale, at refinance, or at an insurance claim after a fire, and it is expensive at all three moments.

Attend the inspections if you can. Inspectors will tell you things.

Lead paint, if the house predates 1978

Renovation disturbing painted surfaces in pre-1978 housing requires a certified contractor using lead-safe work practices, and the required pamphlet must be given to you before work begins.

Ask for the certification number. Non-compliance carries substantial penalties and is a useful fact in any later dispute.

Keep a project file

The contract and every change order
Every preliminary notice
Every lien waiver
Every payment record — traceable methods only, never cash
Photographs, weekly, dated
A log: who was on site, what was done, what was said
Every text and email — do not delete anything
Permits and inspection sign-offs
Product submittals and manuals

Photograph everything before it is covered. Open walls, rough plumbing, electrical, framing, insulation, waterproofing. Ten minutes with a phone before drywall goes up is worth more than any expert report later.

Part four: finishing

Do a punch list walkthrough before final payment. Write it, date it, both sign it, with a completion date for each item.

Do not release retainage until the punch list is done and the final inspection has passed.

Get before releasing final payment:

Final unconditional lien waivers from everyone
The certificate of completion or final inspection sign-off
Warranty documentation, written
Manuals, product information, and any remaining materials
As-built information on anything hidden — where the shutoffs are, what is behind which wall

Never sign a completion certificate before the work is complete. Lenders release money against it.

Part five: when it goes wrong

Look up the notice statute first

Many states have a construction defect notice statute requiring written notice of specific defects and an opportunity to inspect and repair before suit, on a defined timeline.

Failure to follow it can bar the claim entirely. Do not hire someone else and send the bill until you have checked. Doing the right repair in the wrong order forfeits the case.

Defective work

Document immediately — photographs, dated, and a specific written list. Not "the tile is bad." "The tile at the shower threshold is not sloped to drain; water pools approximately 1/4 inch deep after each use."
Notify in writing and give a real opportunity to cure, following your state's statute.
Get an independent inspection — a licensed inspector, engineer, or a contractor in the same trade. Written, photographed, with a repair estimate.
Get two repair estimates.
Withhold proportionally, in writing, stating why. Withholding everything on a contract otherwise being performed can make you the breaching party.
Document their repair attempt and, if inadequate, reject it in writing with the inspector's report attached.

Abandonment

Written demand with a specific deadline to resume, by a method that proves delivery, stating that failure will be treated as abandonment.
Document the state of the work exhaustively — photographs, video, measurements, materials on site.
Two itemized bids to complete.
Compute the damage: reasonable cost to complete, minus the unpaid contract balance, plus consequential damages where allowed.
File the licensing board complaint. Abandonment is a licensing violation nearly everywhere and boards act on it.
File the bond claim early. Bonds are modest and shared among claimants; they go to whoever files first.
Check the recovery fund, if your state has one, and its prerequisites — usually a judgment or a board finding.
Report to the attorney general's consumer division.
Consider a criminal referral where a deposit was taken with no intent to perform; many states have a home improvement fraud statute.

If a lien is recorded

Do not ignore it. It clouds title and surfaces at the worst possible time.
Check timeliness and procedure. Lien deadlines are strict and defective liens are common.
Check whether a required preliminary notice was served. No notice, in many states, no lien.
Demand the general contractor clear it — most contracts require it.
Consider a release bond, which substitutes a surety and clears title while the dispute continues.
Check the claimant's deadline to sue. An unenforced lien expires, and some states let you force the issue by demanding suit.

The free remedies, in order

These cost nothing and should come before litigation:

The licensing board. Investigates, can order restitution, can suspend or revoke. Contractors take it seriously because it is their livelihood.
The bond claim. Administrative, quick, and real money.
The recovery fund, if your state has one.
The attorney general's consumer division.
Better Business Bureau and online reviews — not a legal remedy, but leverage.
The insurer, if the contractor carries liability coverage — a defect claim tendered to a carrier gets attention.

The consumer protection statute

State unfair and deceptive acts and practices statutes are frequently the strongest tool available, and homeowners underuse them because they think in terms of breach of contract.

Why they matter: double or treble damages in many states, and attorney's fees to a prevailing consumer — which is what makes representation available on a $30,000 claim. And in many states, violating the home improvement contract statute is itself a per se deceptive act.

So the missing cancellation notice, the absent license number, the unsigned change orders, and the excessive deposit are not just contract problems. They may be the fee-shifting statutory claim that makes the whole case viable.

Part six: project playbooks

Different projects fail in different ways. Here is what to watch for in the common ones.

Roofing

The highest-risk project for door-to-door solicitation, especially after a storm
Never sign an assignment of insurance benefits without understanding it — it hands over the right to negotiate and often to sue in your name
"Insurance proceeds plus deductible" is not a price; most state statutes require a total contract price
Offering to waive your deductible is insurance fraud in many states, and accepting makes you a participant
Get the shingle by manufacturer and product line, and the underlayment, ice-and-water shield extent, ventilation, flashing, and drip edge specified
Confirm who removes and disposes of the old roof, and how many layers
Confirm the manufacturer warranty requires certified installation, and that yours qualifies
Take photographs of the deck after tear-off, before the new roof goes on

Kitchens and bathrooms

The most change-order-prone projects, because of what is behind the walls
Get the contract to say what happens on unforeseen conditions — rot, old wiring, non-compliant plumbing — and how those are priced
Allowances for cabinets, counters, tile, fixtures, and hardware: go look at what the allowance actually buys before signing
Photograph every wall and floor cavity before it is closed
Waterproofing in a bathroom is the highest-consequence hidden work in residential construction — photograph the pan liner, the flood test, and the membrane
Ask for the flood test on a shower pan and be there for it

Additions and structural work

Requires permits and inspections without exception
Ask whether engineered drawings are required and who provides them
Confirm setbacks and zoning before design, in writing from the zoning office
If there is an HOA, get architectural approval in writing first
Get a survey if you are building near a line
Confirm the contractor's license classification covers structural work
Expect a longer schedule than quoted, and put the schedule and a notice provision in writing

Windows and siding

A common door-to-door and high-pressure sales category
Watch for financing bundled into the sale — shop it independently
Get products by manufacturer and model, including the glass package and U-factor
Confirm who handles the interior trim and paint, which is a frequent exclusion
Pre-1978 house: lead-safe certification is required, and this is exactly the work that disturbs paint

HVAC

Get the load calculation, not a rule-of-thumb sizing. Oversized equipment is the most common defect in residential HVAC and it is expensive forever.
Confirm duct modifications are included
Confirm the permit and inspection — HVAC work is permitted in most jurisdictions and frequently done without one
Ask about rebates from the utility and manufacturer, and who files
Get the manufacturer's warranty registration completed; many require registration within a short window or the term is reduced

Electrical and plumbing

Verify the trade license specifically — a general contractor's license does not authorize electrical or plumbing work in most states
Always permitted and inspected. Work done without a permit is the classic problem discovered at sale.
Photograph rough-in before drywall

Foundations, drainage, and basements

Get an engineer's assessment before the contractor's proposal, not after — a contractor diagnosing a problem they will be paid to solve is a conflict
Understand what the "warranty" covers; many basement waterproofing warranties are limited to re-servicing, not to the damage
Confirm the work will not discharge water onto a neighbor — that is its own dispute
Beware of transferable lifetime warranties from companies with short operating histories

Tree removal and landscaping

Verify insurance with unusual care — tree work injures people and drops limbs on houses
Check the local tree ordinance; permits are required in many jurisdictions
If a tree is near a boundary, confirm ownership before cutting — see the neighbor law materials, because the damages are multiplied

Solar

Understand whether it is a purchase, a loan, a lease, or a power purchase agreement — these are entirely different transactions with different consequences at sale
A lien or UCC filing on the property is common with financed systems; ask
Confirm what happens at sale — assumption, prepayment, or removal
Get the production estimate in writing and ask what happens if it underperforms
Confirm roof warranty implications — penetrations can void a roof warranty
Confirm who handles utility interconnection and the permit

Part seven: a calendar

Before signing

Verify license, insurance (call the insurer), bond
Three itemized bids on one written scope
Call references, including one two years old
Search court records and the secretary of state
Read the contract against your state's home improvement statute
Read the dispute resolution clause and negotiate it
Confirm allowances buy what you want

At signing

Get a copy immediately
Get the cancellation notice and the two cancellation forms
Confirm the deposit is modest and the schedule is milestone-based
Confirm the change order and lien waiver clauses are in

Week one

Confirm the permit was pulled, in the contractor's name
Start the photograph log
Open the preliminary notice folder

Every payment

Verify the milestone is actually complete
Get conditional lien waivers from the contractor and everyone who sent a notice
Pay by a traceable method
File the waiver

Every week

Dated photographs
Log entry: who was on site, what was done, what was said
File every text and email

Before anything is covered

Photograph framing, rough plumbing, rough electrical, insulation, waterproofing
Attend the inspection if you can

At substantial completion

Written punch list, dated, both signed, with completion dates
Do not release retainage

At final payment

Punch list complete
Final inspection passed
Final unconditional lien waivers from everyone
Warranty documents, manuals, as-built information
Then, and only then, release retainage

If something goes wrong

Look up the defect notice statute first
Document specifically
Notify in writing with an opportunity to cure
Independent inspection and two estimates
Licensing board and bond claim in parallel — both free

Part eight: the mistakes that cost the most

Skipping the license and insurance verification. Two hours against a project's entire value.

Signing at the kitchen table under pressure. The cooling-off rule exists because this is where the worst contracts are signed.

A large deposit. It puts the contractor ahead of the work from day one, and money paid is leverage lost.

Calendar-based payments. Milestones, always.

Paying in full before the punch list. Retainage is your only leverage at the end, and homeowners give it away every day.

Verbal change orders. The single largest source of disputed billing in residential construction.

Throwing away preliminary notices. They are the complete list of who can lien your house.

Never getting a lien waiver. The mistake that lets you pay twice.

Cash payments. No proof, and usually a sign of something else.

Not photographing before drywall. Ten minutes that is worth more than any expert report.

Pulling the permit yourself as owner-builder. You just took the code responsibility.

Repairing before checking the defect notice statute. Right repair, wrong order, forfeited claim.

Not reading the arbitration clause. You gave up your day in court and possibly the economics of the claim.

Suing before using the free remedies. The licensing board and the bond cost nothing and move faster.

Part nine: three projects, and what turned them

The $22,000 deposit

Ignatius Beaulieu-Vance signed a $74,000 kitchen contract with a $22,000 deposit. He paid $20,000 more at demolition and $18,000 at rough-in. The contractor disappeared with the cabinets uninstalled and $33,500 in liens arriving from subcontractors he had never hired.

Three failures, all preventable in an afternoon:

The deposit was 30% of the contract — above what many states permit, and it put the contractor ahead of the work from the first day. Every subsequent payment was also ahead of value delivered, which meant that when the work stopped, the money was gone and the work was not there.

Four preliminary notices had arrived in the first six weeks. He threw them away as junk mail. They were the complete list of everyone who could lien his house.

He obtained no lien waivers across $60,000 in payments.

What he did after, in the right order: verified each lien for timeliness and preliminary notice service — one was untimely and fell away; filed a licensing board complaint for abandonment; filed the bond claim in week two, which mattered because the $15,000 bond was shared with four other homeowners and goes to whoever files first; applied to the state recovery fund, which required the board finding he was already pursuing; and sued under the deceptive trade practices act, using the contract's missing statutory terms as a per se violation to get fee-shifting.

He recovered a meaningful fraction. Waivers at every payment would have prevented the entire $33,500.

The shower that leaked

Perpetua Achterberg-Nakamura's new bathroom leaked into the ceiling below within four months. Her instinct was to hire someone else and send the bill.

That would have barred her claim. Her state's construction defect notice statute required written notice of specific defects and an opportunity to inspect and repair before suit.

What she did instead: documented with photographs and moisture readings; wrote a specific notice — not "it leaks," but "water is entering the ceiling below the second-floor bathroom at the shower pan location; moisture readings of 28% recorded at [locations] on [date]; the pan liner appears not to slope to the weep holes"; hired an independent licensed plumber who confirmed the defect and estimated $8,400; gave the statutory opportunity to inspect and repair, in writing with dates; documented the contractor's inspection and their offer to re-caulk; rejected that in writing with the inspector's report attached; got two repair estimates; and filed a licensing board complaint in parallel.

The contractor's insurer settled at $9,100 before suit.

The lesson: look up the notice statute first. Everything else follows from it.

The clause on page four

Thaddeus Oyelaran-Whitcombe's $140,000 remodel went badly. The first thing his lawyer read was the dispute resolution clause: binding arbitration, a named provider, a venue three hundred miles away, fees split equally. The arbitrator's fees alone were estimated at $12,000 to $18,000.

His share, plus travel, plus counsel, made a $60,000 claim marginal.

What one conversation at signing could have done: struck the clause; or carved out small claims; or fixed local venue; or required the contractor to advance the arbitrator's fees subject to reallocation. Contractors who want a $140,000 job agree to all four regularly — because nobody asks.

His lawyer challenged the venue and cost provisions as unconscionable and argued that the state's home improvement statute limited arbitration clauses in residential contracts. The provision was narrowed and the case was heard locally.

The lesson: the dispute resolution clause is the most consequential paragraph in a construction contract and the one nobody reads.

Part ten: what to say

Verifying insurance: "Could you give me your insurance agent's name and number? I'd like to confirm coverage directly — I do that for every contractor." Said matter-of-factly, this is unremarkable. A contractor who resists has told you something.

Asking about exclusions: "What's not included in this price? Specifically — permits, disposal, unforeseen conditions behind the walls, patching and painting adjacent areas, electrical upgrades if code requires them?"

On allowances: "The $4,000 hardware allowance — can you show me what that actually buys at your supplier? I'd rather know now."

On the payment schedule: "I'd like the payments tied to completed milestones rather than dates, and I'd like to hold 10% until the punch list is done. Is that workable?"

On lien waivers: "I'd like to make conditional lien waivers a condition of each payment — from you and from anyone who sends a preliminary notice. I'll pay within seven days of receiving them."

On arbitration: "I'd like to strike the arbitration clause, or at least carve out small claims and set venue locally. What works for you?"

On a change: "Before you do that — can you write it up as a change order with the price, and we'll both sign it?"

On a defect: "I'm writing to give you notice of specific defects and an opportunity to inspect and repair, under [state statute]. Here is the list, with photographs. Please let me know within [N] days when you'd like to inspect."

When work has stopped: "No one has been on site since [date]. I'm asking you to resume by [date, ten days out]. If work has not resumed by then, I'll treat the contract as abandoned and proceed accordingly."

To the licensing board: "I'd like to file a complaint and I'd also like to know: does this state have a recovery fund, what are its prerequisites, and what is the deadline to apply?"

Part eleven: financing, where the real damage happens

The financing side of home improvement produces more serious harm than the construction side, because it puts the house at risk.

Shop the financing separately. Contractor-arranged financing is a product the contractor is paid to sell. Price a home equity line at a credit union, an unsecured personal loan, and a promotional-rate card before accepting whatever the salesperson brings.

Be very careful about a lien on your home for ordinary repairs. A $14,000 roof financed with a mortgage converts a manageable debt into a foreclosure risk. If a security interest in your home is involved, you have a three-business-day right to rescind — extended to three years if the required disclosures were not properly given.

Watch for high-cost features: high rates, points rolled into the balance, balloon payments, prepayment penalties, negative amortization. Loans crossing statutory thresholds trigger additional protections and restrictions.

Assessment-based financing — where repayment rides on your property tax bill as a special assessment — deserves particular scrutiny. It creates a priority obligation on the property, complicates sale and refinance, and has frequently been marketed door-to-door alongside the work itself. Ask directly whether repayment attaches to the property.

Never sign a blank or incomplete financing document. Never sign one the contractor offers to "fill in later."

Never sign a completion certificate before the work is complete. Lenders release funds against it, and signing early releases the money and destroys your leverage in the same stroke.

Part twelve: storm and insurance work

Restoration after storm, fire, or flood is a distinct market that arrives when homeowners are least able to evaluate anything.

The insurer's adjuster and the contractor's estimator both have interests, and neither is yours. A public adjuster works for you, for a percentage — and they are licensed and regulated in most states, so verify.

Do not sign an assignment of benefits without understanding it. It transfers the right to collect and frequently to litigate in your name. Several states restrict them in property claims.

Get the contractor's scope in writing and compare it line by line to the insurer's estimate. The gap is the argument, and it is your argument.

Emergency mitigation is not repair. Water extraction and board-up happen fast, often on a document signed at 2 a.m. Read it anyway, and watch for language committing you to the full restoration.

Deductible waivers are illegal in many states. A contractor offering to "cover your deductible" is proposing fraud, and accepting makes you a participant.

Verify out-of-state status. Post-disaster markets attract crews who arrive, collect, and leave. Check state licensure, a local physical address, and how long they have operated in the state.

Take your own photographs before mitigation begins. The condition of the property before anything is removed is the evidence for the insurance claim, and it disappears within hours.

Part thirteen: what a project actually costs to fight

Homeowners consistently underestimate what a construction dispute costs, and the estimate should be made before the first demand letter rather than after.

Free, and should always come first: the licensing board complaint · the bond claim · the attorney general consumer complaint · the recovery fund application, where one exists · tendering the claim to the contractor's liability insurer.

A few hundred to a few thousand dollars: an independent inspection · an engineer's report · two repair estimates · a lawyer's demand letter. This tier is where most disputes resolve, and it is dramatically underused because homeowners jump from "I'm angry" to "I'll sue" without stopping here.

Small claims: a modest filing fee, a few hours of preparation, and a hearing within weeks. Limits run from a few thousand to $25,000. No lawyer. Check whether your arbitration clause carves it out — many do.

Arbitration: filing fee, plus arbitrator fees that on a multi-day residential hearing can run $12,000 to $18,000, split or allocated by the clause. Plus counsel. This is the tier that quietly makes moderate claims uneconomical.

Litigation: on a residential construction defect case, expect $20,000 to $75,000 and a year or more, with expert costs a substantial share. A fee-shifting consumer protection claim changes this calculus entirely, which is why the compliance defects in the contract matter so much — they are frequently what converts an uneconomical case into a viable one.

The honest arithmetic: on a $12,000 problem, the free remedies plus a $600 inspection plus a $400 demand letter is the whole reasonable budget. On a $60,000 problem with a fee-shifting statutory claim, litigation may be rational. Between those, small claims and mediation cover most of the ground.

And one thing that is free and works more often than it should: a written, specific, unemotional demand letter with an independent inspection attached and a stated deadline. Contractors settle these, because their insurer would rather pay $9,000 now than $40,000 and a licensing complaint later.

Frequently asked questions

How much deposit is normal? Modest — many states cap it. A demand for 30% or more is a warning sign.

Can I fire them? Follow the contract's termination provision. Terminating without notice and an opportunity to cure can make you the breaching party.

Do I have to let them fix it? Frequently yes — check your state's defect notice statute before doing anything else.

They put a lien on my house and I paid in full. Check timeliness and preliminary notice. Demand the general contractor clear it. Consider a release bond.

They're not licensed. In many states they cannot enforce the contract or recover for the work, and you may recover payments made. But they also likely have no bond, insurance, or assets.

How long do I have to sue? Contract limitations vary, and construction defects are frequently governed by separate statutes of limitation and repose — repose running from completion regardless of when you discovered the problem. Find out early; repose is absolute.

Should I go to small claims? For anything under the limit, yes — fast, cheap, no lawyer. Check whether your arbitration clause carves it out.

Is the contract enforceable if it doesn't meet the state statute? Frequently not, against you. That is the point of the statute, and it is worth reading yours.