How to Deal With a Bad Contractor, A Houston Construction Consultant's Guide to Avoiding Court
Bad contractors are one of the most common, and most expensive, problems real estate investors face. It doesn't matter how experienced you are, how thoroughly you vetted them, or how airtight your contract was. At some point in your investing career you will end up in a situation with a contractor who isn't delivering. What you do in that moment will determine whether you lose thousands or recover your project. Here's what 20 years of construction and investing in Houston has taught me about handling it.
Depending on where you live, (Im in Texas) you have a lot of options. The best one is to figure out how much of a professional your potential trade is before you even reach out. You can do this VERY easy now days. Social media and the internet has made researching and even getting referrals very easy. Keep in mind, that people who rush to find someone to do a job for them, and even worse want it done "cheap" will often find themselves "in a pickle".
How to Avoid a Bad Contractor Before You Hire One
But even those who do their research, get references, and do their homework find themselves with a bad contractor/trade.
The fastest way to vet a contractor in Texas:
Search their business name on Google, Facebook, and the Better Business Bureau, but read the negative reviews carefully. One or two complaints on an otherwise solid record is normal. A pattern of unfinished work, no-shows, or billing disputes is a red flag.
Ask for references from projects similar to yours in scope and budget, and actually call them. Most people don't. The ones who do rarely get burned twice.
Never hire based on price alone. The cheapest bid almost always costs the most in the end.
When Good Contractors Go Bad, What's Usually Really Happening
90% of the time the thing getting in the way of the project is ego. Lots of people get into projects they can't get out of, under budgeted, over promised, etc. And sometimes project owners are unreasonable, or uninformed. These are the main causes of law suits. Rarely is the company who is checked out and watched over the one who takes advantage or "screws up big time". Yes trades are responsible for their workmanship/results, but if its your investment then you are responsible for them. (just ask your lender)
The Resolution Most People Skip Straight Past
At the end of the day a good, honest, respectful, line of communication can resolve most problems. Its getting all sides to let go of their idea of a "win" in order to allow both parties to come to resolution that they both "win"...i.e. win-win.
If your best efforts to resolve this matter in my suggested way doesn't work, contact me for a free consultation on litigation avoidance. Working things out, outside of court, is the best resolution for all parties. i.e. win-win.
If your best efforts at resolution aren't working, before you call a lawyer, call me. I've mediated contractor disputes for investors and developers across Houston and saved clients far more in avoided litigation than my fee ever costs. Sometimes all it takes is having someone in the room who speaks both languages, construction and business, to find the path forward that works for everyone.
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