What to do When the Contractor has been Paid in Full
Someone recently googled the keywords listed in the title, alerting me to the fact that when one has lost the leverage of the final payment, the homeowner is frequently at wit's end. Many homeowners end up kicking themselves when a contractor abandons a job, or ignores the final punchlist once payment has been made. What is a homeowner to do?
First of all, understand that you are not alone. Many bright, intelligent people make the final payment for a variety of reasons.
Two, make a game plan. If there is work that still needs to be done, or punchlist items that have been ignored, send the contractor a demand letter outlining the work and proposing a schedule for completion. Tell him or her that s/he has x days to respond with a reasonable proposal (offer of settlement), or you will take further action.
In Massachusetts, under the Consumer Protection Act, one is required to write a 30-day demand letter in order to pursue a claim that may ultimately pay double or treble damages, attorney's fees, interest and costs.
If the contractor responds, then write up an agreement that will build in consequences if he fails to follow through.
If the contractor does not answer, request the help of the building inspector, office of consumer affairs for your state, Better Business Bureau, or the agency that regulates contractors.
If all else fails, you may enlist the help of an attorney. Taking action will remove that feeling of helplessness and hopefully move the project forward to a successful result.