Short answer
Don’t pay the remaining balance if the contractor has stopped work. Pay only for properly completed, inspected work that matches the contract and approved change orders—backed by lien waivers. Put everything in writing, send a formal “cure” notice with a deadline to resume, secure the jobsite, and be ready to bring in a replacement contractor. If needed, involve your state licensing board, the contractor’s bond/insurer, a mediator/arbitrator, or a construction attorney.
Why this protects you
Most home improvement contracts tie payments to milestones. If work has stopped, paying ahead removes your leverage and can expose you to mechanics liens from subs/suppliers who still haven’t been paid. Using a structured response—documentation, cure notice, conditional payments with lien waivers—keeps you on solid ground and creates a clear paper trail if the dispute escalates.
Step-by-step guidance
1) Document the status today
- Photograph and video every area (wide shots first, then details). Include date/time stamps.
- Collect your paperwork: contract, change orders, permits, inspection reports, communications, checks/receipts.
- Create a payment ledger showing what you’ve paid versus the contract schedule-of-values.
- If possible, have a third-party inspector or experienced estimator assess percentage completion. Expect $300–$800 for a written report.
2) Verify what is actually owed
- Compare completed work to your contract milestones and any approved change orders.
- Calculate retainage (commonly 5–10%) to hold until final completion and punch list.
- You only pay for work completed to date—not the remaining contract balance.
3) Send a written cure notice
- Deliver by email and certified mail. Give a clear deadline (typically 5–10 business days) to resume and a list of items required to continue payment (schedule, inspection pass, lien waivers, etc.).
Example language:
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Subject: Notice to Cure and Resume Work
Per our contract dated [date], you have ceased work since [date]. Please resume by [date] and provide a written schedule to complete. Upon resumption and verification of completed work, we are prepared to issue a progress payment of $[amount] against documented, inspected milestones in exchange for conditional lien waivers from you and all known subs/suppliers. If you do not cure by the deadline, we may terminate for cause and hire a replacement, with costs offset against the unpaid balance.
```
4) Offer conditional progress payment (not the balance)
- If they resume and pass inspection, pay only the verified amount due for work in place.
- Require lien waivers:
- Conditional waiver upon progress payment from the GC and every sub/supplier you know of.
- Unconditional waivers after funds clear.
- Consider joint checks to subs/suppliers to prevent non-payment claims.
5) Secure the jobsite
- Lock doors/windows; protect open structures with tarps or temporary sheathing.
- Shut off exposed circuits at the breaker; cap any exposed wires; cover open junction boxes.
- Close or fence off open trenches; remove trip hazards and nails; post temporary caution tape.
- Protect materials you’ve paid for on-site with locked storage if possible.
6) Escalate if they don’t cure
- Check your state’s contractor licensing board: file a complaint. If licensed, there may be a recovery fund or required bond.
- If a bond exists, initiate a claim. Cost: typically free to file.
- Follow dispute resolution steps in your contract (mediation/arbitration). Many cases resolve quickly with mediation ($300–$800/session).
- Consult a construction attorney for a demand letter or termination guidance. Expect $250–$450/hr; a focused consult can be 1–2 hours.
7) Terminate and replace (if required)
- Terminate per contract terms after the cure period.
- Bid out the completion scope using the inspector’s report and your photo log.
- Keep all costs, receipts, and new contracts—you may offset these against the original contractor’s unpaid balance.
Tools and materials you’ll need
- Smartphone or camera with date/time stamps
- Notepad or spreadsheet for a payment ledger
- Tape measure; level; outlet tester; flashlight; moisture meter (if framing/roofing/waterproofing is involved)
- PPE: gloves, safety glasses, hearing protection, dust mask
- Tarps, plastic sheeting, duct tape, zip ties, temporary fencing/caution tape
- Lockable storage bin for materials
Safety considerations
- De-energize exposed wiring at the panel and label the breaker. Do not touch live conductors.
- Cap unused gas lines and close shutoff valves; if you smell gas, evacuate and call the utility.
- Cover open floor cutouts and stair openings with screwed-down plywood, clearly marked.
- Weatherproof roof or exterior openings the same day with tarps or peel-and-stick flashing to prevent water damage.
Tips for best results
- Use milestone payments, not calendar dates. Example:
Framing complete, passed inspection: 20% Rough MEPs complete, inspections passed: 20% Drywall hung/taped: 15% Cabinets, trim, tile installed: 20% Final finishes and punch list: 15% Retainage (release at final): 10% - Require written, priced change orders before any extra work.
- Keep all communications in writing; confirm phone calls by email.
- Use escrow for larger draws so funds release only when milestones are verified.
Common mistakes to avoid
- Paying “to get them back on site.” This usually backfires.
- Releasing funds without lien waivers from the GC and subs/suppliers.
- Allowing removal of installed materials. If they attempt it, call local law enforcement—it may be considered theft.
- Ignoring preliminary notices from suppliers; use them to gather lien waivers from every party.
- Letting a new contractor start demo before you’ve fully documented the job.
When to call a professional
- You receive a lien notice or threat—consult a construction attorney promptly.
- Structural, electrical, gas, or waterproofing work is left exposed—bring in licensed pros to make safe and weather-tight immediately.
- The contractor is licensed/bonded—file with the state board and the bond surety right away.
Rough timing and cost
- Cure notice: same day; set 5–10 business days deadline.
- Independent inspection report: 1–3 days; $300–$800.
- Attorney demand letter or consult: 1–2 weeks; $300–$900 typical for initial work.
- Replacement bids: 1–2 weeks.
Staying methodical—pay only for verified work, demand proper documentation, secure the site, and escalate through the proper channels—gives you the strongest position to finish the project and protect your budget.