Contractor Caveats: What to Do When Renovations Go Wrong

I’ll admit it: I hired a contractor for an addition to our home without having a lawyer review the contract. In hindsight, that was a big mistake—but my biggest error was hiring that particular contractor in the first place. Three years after signing, with the renovation still incomplete, I fired the company. This time, I had a lawyer handle it. 

“Why do you need a lawyer?” my friend asked. Understandably, most people would assume that you could just fire your contractor, but it’s really not that simple. “A contractor can sue after being fired if the termination violates the agreement or is done without cause,” says Shane Lucado, an attorney in Alabama and founder of InPerSuit.

Home improvement projects have been on the rise in recent years. In 2023, homeowners spent $485 billion on renovations and repairs, according to a Harvard University study. But finding a reliable contractor isn’t easy. All you need to do is watch a few episodes of NBC’s investigative series To Catch a Contractor, and you’ll soon realize how many unreliable and even criminal contractors are out there. This is not the norm, of course, but it’s also not an exception. In a 2024 survey by Clever Real Estate, 29 percent of the respondents said they fired a contractor in the middle of a project. 

Are you thinking of firing your contractor? Here’s how to do it the smart (and legal) way, according to an expert.

Review your contract with a lawyer 

“Before terminating a contractor, a homeowner should review the written contract line by line,” says Lucado. The contract may specify the terms for how to properly terminate your contractor. “If the agreement requires seven days’ written notice and gives the contractor a right to fix performance issues, skipping that process can backfire,” he adds. In other words, if you don’t follow the termination procedure outlined in the signed contract, the contractor may have grounds to sue you.

Gather all documentation—emails, receipts, and photographs

The more documentation you have regarding the renovation—including mistakes—the less likely the contractor will be able to sue you for wrongful termination. I provided my lawyer with pertinent emails, invoice payments, and photographs. She used this information to draft the termination letter.

Lucado shares a similar story about the importance of documentation. “The client documented every delay, logged every subcontractor interaction, and eventually hired a licensed inspector to issue a report identifying 11 specific violations,” he says. This documentation was used in a lawsuit. “The case settled in mediation within 90 days, with a repayment plan of $38,000 and formal release of lien rights.”

Send a letter of termination

“A homeowner should deliver a formal letter with the specific contract clauses cited, along with a clear description of the problem,” says Lucado. 

You could write the letter yourself, but since there was a possibility of being sued, I chose to hire a lawyer. First, I booked a free consultation with three different attorneys before hiring the one I felt would best represent me. I’m glad I did since each lawyer had a different approach and style for handling the situation. The letter my lawyer sent outlined the ways the contractor breached the contract, such as requesting final payment before the work was completed.

“That notice should be sent by certified mail or a trackable service. If the issue involves safety violations or code failures, including copies of inspection reports or dated photos strengthens the case,” says Lucado.

Keep it professional

It’s easy to become angry when a contractor has improperly renovated your home, taken large sums of your money and refused to accept responsibility for their actions; however, it’s still important to keep things professional. “Facts beat feelings when contracts are involved. Do it wrong, and you are buying yourself a court date,” says Lucado.

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Even though I had a negative experience with one contractor, the person who ended up finishing the job was incredible. We have our dream home and proudly show it to people who visit.