When to Fire a Home Building Contractor

Hiring a home building contractor is never an easy task. Firing a home building contractor can be even more difficult and challenging. The trick is to reduce the risk of having to fire a contractor before you hire him. How can you do this? Start with a good interview process, followed by a comprehensive written contract between you and your building contractor.   The contractor interview process should include at least two scheduled face-to-face meetings to enable you to interact with the prospective contractor, prior to hiring him.

During the interview process you should:

•  Review your project plans with the prospective contractor

•  Review his bid/quote for the project

•  Assess his knowledge of the work to be performed

•  Assess his work practices / ethics

•  Discuss/review recent and past similar work performed by him

•  Acquire references from him on recent and past similar projects

•  Contact references

•  Visit his current job site, preferably while he is on site

•  Contact him via phone a couple of times to assess his non-face-to-face interaction and response time for returning calls.

 

The written contract should clearly spell out:

•  Work to be performed

•  Who will perform what work (contractor vs subcontractor, vs homeowner)

•  Payment Schedule

•  Start date

•  Finish date

•  Time Schedule for completing various phases of the project, with progress payments tied to them

•  Penalty clauses in the event project milestones are not met

•  Language that clearly spells out the grounds for immediate termination of contractor and/or subcontractors including, but not limited to:

•  Substance abuse (Drug or Alcohol) on the jobsite

•  Gross incompetence and/or negligence

•  Work is not being performed to building codes/standards

•  Material Theft or Damaging property

•  Threatening behavior to anyone on the jobsite

•  Not showing up regularly on the jobsite

•  Signature Lines for both the homeowner and contractor

With a thorough interview process, and a well-written and signed contract in place, the risk of having to fire a contractor should be dramatically reduced. However, even with these efforts in place the occasional situation may arise where a contractor needs to be fired. Understand, however, that firing a contractor should be a last resort situation, as things could get legally messy for you. A home building contractor could attach a mechanics lien to your home for work not paid for, and/or take you to court. Either situation will inevitably cost you money and may threaten your ability to complete your project.

 

When firing a contractor you should:

• Communicate to them why they are being fired (relative to the contract language)

• Require them to sign lien waivers preventing them from attaching liens to your property

• Pay them for work completed to date (but only if they have signed the lien waivers)

Another situation, which can breed a corrosive relationship between the homeowner and the contractor, and lead to the eventual firing of a contractor, is the initial upfront payment made to the contractor. When hiring a home building contractor, the amount of upfront money to be paid to him should be reasonable and fair for both parties. Too frequently you hear of the situation where the homeowner gave a 50% deposit to the contractor and then waited weeks/months for him to show up on the site.  Avoid this situation by limiting the amount of the initial “sign-on” payment to 10-15% maximum of the total cost of the project, and tying additional payments to work milestones completed.

 

Building a new home or home addition should be an exciting and fun project. By doing your homework up front when hiring a contractor you should be able to avoid the need for firing him at some later point. Remember it is best to attempt to work through problems with your building contractor first, before quickly deciding to fire him over a single incident. Both parties should make attempts at fairness and understanding of each other’s situation/circumstance that has lead to a dispute. Only after multiple attempts to resolve problems have failed should you resort to firing the contractor.