Your contractor ran off with your deposit. What do you do?

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Most of the time when paying for big projects, a request is made for a down payment. In construction projects, one of two things will happen next—the contractor will begin work as promised, or he’ll delay the project and work on other projects. In the latter case, you have to make a decision about how to deal with an unresponsive contractor. Your next step may make or break your plans to complete your project.

Some contractors will walk with your deposit if they know the consequences of their negligence are minimal. Some states don’t even license certain trades, and if they do, the license is only in effect on jobs of a minimum dollar amount. For example, California requires licensure for all types of contractors on jobs of at least $500, while Louisiana requires it if the project costs at least $7,500. If you live in a state like Idaho, Illinois, Indiana, Colorado, the state does not license general contractors. Therefore, it’s a good idea not only to verify if your contractor is licensed, but whether getting your deposit back is even feasible based on the dollar amount of the job.

You may want to take these requirements into account when deciding how aggressively to demand that your contractor complete the job.


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