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how to prove and fight a contractor that abandoned the job

california General contractor was hired for whole house remodel, collected 20% deposit and was to be paid in phases upon completion of work. He kept collecting advance payments (taking advantage of someone who didn't know how the process worked). He was explicitly asked why he was taking advance payment and that it wasn't working out for us this way and he replied that it was the nature of the remodel. Took way over the proposed time frame and ultimately abandoned the project leaving a lot of work to be done. Refused to come back to work citing "money owed" however the money doesn't correspond with the actual work completed. He filed a mechanics lien, we filed a cslb complaint and a complaint with the bond company. Bond company says we terminated the contract because we refused to pay him, even after he abandoned the project we met with him to give him opportunities to come back which he refused to do. What is the most appropriate way to prove that he abandoned the project and what violation codes can be cited? He left the house in shambles with a lot of HVAC and electrical hazards/issues including a lot of shoddy work that needed to be corrected. He told a neighbor that he was using this as a “fill in job” because he “underbid”.

3 replies

Jan 16, 2018

With a dispute this far along, it would be wise to seek counsel in deciding how to move forward. However, proving that a contractor abandoned a project and was not terminated from the job can be tough sledding under California Business and Professions Code 7107. Collecting and maintaining a file of all contact and interactions with the contractor will go a long way toward proving abandonment - namely, copies of written, email, and/or text message communications will be especially helpful. Further, documenting any and all deficient or incomplete work (before any necessary repairs or work is undertaken) will also provide valuable ammunition against the contractor. An affidavit of that neighbor's statements could be helpful, too.

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Feb 12, 2019

Matt's right in that it was probably best to enlist the assistance of counsel to determine a path forward, and I hope this situation was successfully worked out. For others that may be in the same situation, though, I can add a bit more info, below:

First, in the situation as described, it's worth noting that a Home Improvement Contract in California has many very strict requirements, you can read more about those here. One of these specific requirements is that: The down payment required by a Home Improvement Contract cannot be more than $1,000 or 10% of the contract amount, whichever is less, and the contract must include the following sentence in at least 12-point bold, CAPITAL type: “THE DOWN PAYMENT MAY NOT EXCEED $1,000 OR 10 PERCENT OF THE CONTRACT PRICE, WHICHEVER IS LESS." It is an additional requirement that the following statement also be included and followed: "IT IS AGAINST THE LAW FOR A CONTRACTOR TO COLLECT PAYMENT FOR WORK NOT YET COMPLETED, OR FOR MATERIALS NOT YET DELIVERED. HOWEVER, A CONTRACTOR MAY REQUIRE A DOWN PAYMENT."

A good move if it appears that a contractor has abandoned the project is to send a written notice to the contractor that s/he is in breach of the agreement, and that the homeowner will mitigate damages by hiring additional contractors to finish the work. Depending on the safety of the property if the work is substantially unfinished, the property owner may also need to deal with making sure homeowner's liability insurance is not cancelled and remains in effect.

In many cases, the only practical recourse the property owner has is to try to recoup the money from the contractor after the project is completed, including any extra amounts that the owner had to pay to additional contractors to finish and/or fix the work.

A complaint can be made with the Contractor's State License Board ("CSLB") regarding the contractor both for failure to include the proper provisions in the contract, and for other breaches. Business and Professions Code Section 7113 notes that a contractor may be disciplined for a "failure in a material respect on the part of a licensee to complete any construction project or operation for the price stated in the contract." Abandonment without a legal excuse under Section 7107 is penalty-worthy, but as Matt mentioned, a thorough paper-trail is generally required.

Abandonment of the project can be shown by, among other things, the contractor actually leaving the project and specifically relinquishing rights; by failing to pay subs sufficiently causing the subs to abandon the project; by breach of the contract and failure to cure such breach; or by refusing to communicate in a reasonable time.

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Aug 9, 2021

We had an ADU built with intentions to rent. We obtained a construction loan with Quickenloans, they used Land Gorilla to disperse the Funds. The contractor was eventually paid in Full and the contractor never completed the final permits. FYI: With open permits, we can't rent/sell or Refinance. After 5 months of excuses, blamed on: covid/city delays for permits, we took over the job and completed it at our expense, and with an additional $900/month mortgage increase from our construction loan. I forgot I even filed a complaint with the CSLB but still thank-full. (California Stare License Board), so I finally had some fire-power on my side. However, CSLB say they can't enforce anything because I went ahead and hired another contractor to correct the existing issues to pass final inspection, then no issues further remain, right? It's like a soap opera!

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