If your contractor ghosts you, try to spook them into getting your money back
If you hired a contractor to complete a project in your home, but they never showed up to do the job, you might be wondering what you can do to get your deposit back or finally get the contractor to return your calls. Luckily, there are several options for what to do when a contractor vanishes. Here are the steps you can take, plus a few ways to ensure the next contractor you hire is on the up and up.
1. Stay Calm and Contact Them Several Times
While it’s easy to be frustrated when your general contractor or drywall professional doesn’t show, consider first that it may be a miscommunication. Most contractors are hardworking, trustworthy professionals, though there are a few bad eggs in every profession who lack integrity. Rather than assuming that your contractor is stealing from you, it’s possible there’s been an illness, death in the family, or other delay.
Contact your contractor by phone or email with respect and compassion. Reach out three times and consider dropping in to their place of business or contacting a representative at their company.
Document all attempts to contact them, as these records can come in handy later if you pursue legal action.
2. Send a Registered Letter (or Two)
If you feel a contractor has ripped you off, you can send a formal letter or have your attorney help you write one. A signed letter is often enough to get a contractor to finish the job or return your deposit.
In your letter, detail your expectation for them to perform the terms of your written contract (hopefully you have one). You can mention that if you don't hear from them or get your deposit back, you'll contact their licensing board, the Better Business Bureau, the district attorney's office, or their bond company.
Send your letter as a registered letter through the postal service so you have proof of sending it. Registered mail also offers verification that the letter was delivered or that delivery was attempted. Having proof of a sent letter is beneficial if you decide to pursue arbitration or a small claims court case later on.
Detail out next actions you plan to take if you don't hear from them within a certain timeframe, such as 10 or 14 days.
3. Contact Agencies That Can Help
Several state and local agencies can help you with a disappearing contractor who’s gone off with your deposit without doing any work. Depending on your state and the type of local contractor you used, some agencies may be more helpful than others. They can help you take action against a bad contractor by offering legal support or putting the contractor’s business or license in jeopardy.
Contact one or several of these top agencies to see who can help you best.
Better Business Bureau (BBB): You can file a complaint with the BBB, which might entice the contractor to finish the job or at least give your money back. The BBB also provides mediation and arbitration services from informal to conditionally binding. You may be able to settle the issue through the BBB without going to court.
Contractor Recovery Fund or Homeowner’s Recovery Fund: These state-run groups compensate homeowners who suffer a loss from fraudulent activity by a contractor.
Department of Consumer Affairs: Consider filing a complaint with your state’s consumer protection division and ask them for help with your case.
Local District Attorney's Office: Contact your local district attorney’s office and ask them how to file a fraud complaint or formal police report. Follow their recommendations of what steps to take first, such as filing an official complaint before going to the police.
State Attorney General's Office Consumer Fraud division: Your state attorney’s office can help you file a complaint or support you in the legal process.
Consumer Protection Agency: Report fraud from a contractor and ask for assistance or legal support.
Home Builders Association: The National Homebuilders Association or your state’s home builder’s association might assist you and offer you resources when a contractor suddenly disappears.
Your Bank or Credit Union: If you paid the contractor deposit by check, contact your bank to see if they can put a fraud alert on the contractor’s account. The contractor’s bank may be able to freeze the funds in their account.
State Licensing Board: The licensing board that issues and maintains contractor licenses may be able to help you report fraudulent activity, and the board may cancel the contractor's license.
Local Police: Before going to the police, protect yourself by talking with your local district attorney’s office or a lawyer about recommended steps. Sometimes but not always, going to the police about fraud or theft can help.
Local News and Consumer Reporters: Some local news stations, journalists, and radio stations cover stories about contractors who disappear. They may investigate the issue, expose the fraud, and notify the community. Your contractor may reach back out to you to help clear their name and reputation.
4. Make a Claim Against Their Bond
Bond companies protect homeowners financially in cases of fraud and damage. If you hired a licensed and bonded contractor, you can file a complaint with the licensing board against their bond. But you need to provide proof, which is why your written contract, payment history, and records of contacting the contractor are essential.
Before filing a claim against their bond, you’ll usually need to inform your contractor that you plan to do so. The threat alone might be enough to convince the contractor to finish the job or give you your money back.
5. Request Arbitration
Arbitration is a low-cost process where a neutral or third party mediates a resolution between you and the contractor. These out-of-court hearings are a great way to come to a final agreement without stepping into court. Ask an attorney about how to approach arbitration and what they recommend for your case.
6. File a Small Claims Court Suit
If your claim is minor, you can file a suit through small claims court. Each state has a limit, some at $3,000, $8,000, or up to $25,000. You can file a small claims case yourself or have an attorney help you.
Typically homeowners consider small claims court after they've tried arbitration, as there are fees to file a suit. Some contracts even dictate that you must pursue arbitration before taking legal action.
7. Hire an Attorney
If you cannot resolve the issue through other routes, you may wish to hire an attorney. While expensive, it could be worth it if your claim is large enough. Consider contacting a contract attorney and asking them if your claim is substantial enough and has merit. The rate for contract attorneys can be up to $120 per hour.
8. Leave a Review
Beyond resolving your case, it's important to help other homeowners avoid the same challenges. Post an honest, helpful review about your experience with the contractor on websites and online forums. Reviews—good and bad—help homeowners make smart hiring decisions and dodge financial loss.
How to Prevent Contractor Issues
The best way to hire the right person for the job is to get at least three different quotes for the project and vet each contractor.
Follow these top tips for avoiding contractor issues and finding the right person for the job:
Read reviews and ask for recommendations from family and friends
Get at least three quotes
Interview them, asking pertinent questions about the project and their experience
Verify they are licensed and bonded (starting with the Angi licensing tool can help)
Check their contractor's status with the BBB
Ask for a background check
Sign a written contract outlining project details, timelines, responsibilities, and payment terms
Pay a reasonable deposit—typically 15% or less of the total project cost (and be sure to get a receipt)