Dispute with your remodel contractor? What to do, step by step

Most remodel disputes come down to money, quality, or time. Whichever one it is, homeowners who handle it well do the same things in the same order: they get organized, they put the problem in writing, and they move to outside help only when talking has stopped working. The examples here are from California, where the state licensing board publishes its process. Other states differ.

1. Get your records together first

Before you call anyone, collect:

• The contract (all pages) and every change order
• Proof of every payment: cancelled checks front and back, card statements, transfer receipts
• Photos and videos of the work, with dates
• Texts and emails, plus a log of calls and site conversations

The FTC suggests keeping notes and copies of letters and documents for your files (FTC). California's licensing board asks for the same things with a complaint: the full contract, change orders, cancelled checks, and photos (CSLB complaint guide, PDF).

2. Put the problem in writing

The FTC's first step is to try to resolve it with the contractor, and to follow any phone conversation with a letter sent by certified mail, return receipt requested, so you can prove it arrived (FTC). Keep it short and factual: what's wrong, what the contract says, what you want done, and a reasonable date. Keep a copy. CSLB will ask whether you formally notified the contractor of your concerns, and links to a publication with a sample letter (CSLB, Filing a Complaint).

3. Think carefully before withholding money

It's tempting to stop paying. Be careful:

• Your contract's payment terms still apply. Withholding money the contract says is due can put you in breach. If you're not sure, ask a lawyer first.
• Some withholding is built into the law. In California, you can hold the next payment until you have unconditional lien releases for the last one (CSLB). In Texas, owners must keep back 10% during residential work and for 30 days after (Tex. Prop. Code § 53.101). See lien waivers for homeowners.
• Never pay ahead of the work. In California, payments can't exceed the value of work performed, apart from the down payment (Cal. BPC § 7159.5).
• Paid by credit card? Federal law may let you withhold payment from the card issuer for a disputed purchase. The FTC lists the conditions: it cost more than $5, you bought it in your home state or within 100 miles of your billing address, and you tried to resolve it with the seller first (FTC).

4. Try mediation

A neutral third party may help when talking has stalled. The FTC lists dispute resolution programs among the places to get outside help (FTC). In California, CSLB reviews written complaints, sends the contractor a notice that encourages resolution, and may offer mediation, which is done by phone (CSLB complaint guide).

5. File a complaint with the licensing board

What CSLB can and can't do in California (CSLB, Filing a Complaint; complaint guide):

• It handles license-law violations by licensed or unlicensed contractors for up to four years from the act.
• It runs a mandatory arbitration program for disputes with alleged damages of $25,000 or less, and a voluntary one for $25,000 to $50,000. Complaints must meet strict criteria.
• It can cite or discipline a contractor, and citations can include civil penalties of up to $30,000.
• Its investigation isn't meant to get your money back, and it doesn't guarantee restitution.

Outside California, the FTC points you to your state attorney general or local consumer protection office (FTC). Many states also have a contractor licensing board.

6. Look at the contractor's bond

California contractors must carry a $25,000 contractor bond (CSLB, bond requirements). A bond claim is filed with the surety company, not with CSLB (CSLB, complaints against licensed contractors). The license lookup on CSLB's site shows the bond company.

7. Small claims or a lawyer

If your main goal is money, CSLB points you to small claims court for damages of $12,500 or less and to an attorney above that (complaint guide). In California small claims, an individual can sue for up to $12,500, filing fees run $30 to $100, and lawyers generally can't represent you in court (California Courts Self-Help). Limits differ in every state.

If the contractor wasn't licensed: in California, it's illegal to contract for jobs of $1,000 or more (labor plus materials) without a license, and CSLB warns that homeowners may have little recourse (complaint guide).

Keep the record as you go

For specific problems: poor work, damage to your house, or no written contract. A dispute is easier to explain when the facts are already written down. RenoBinder keeps your decisions, change orders (proposed, approved, rejected, with amounts and days), and planned, committed, and paid budget lines in one place, with dates.

General information, not legal advice. Dispute processes, dollar limits, and deadlines vary by state and change. For anything significant, talk to a local attorney.

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