About once every year or two we end up with a (client with a..) contractor who is horrible, no good, bad. I mean, the type of contractors who don't do the work, screw everything up, abscond with the money, won't complete the job, etc.
These projects are always:
1) Residential
2) Client hires an unvetted contractor
3) The low bid
4) Sometimes the owner even knows it's a unrealistically low bid, but hires them anyway "to get a deal".
5) The owner overpays the contractor before the work is done
How does all of this happen? Client gets seduced by a low price, doesn't discuss contractor selection with us (we are doing limited services) and/or hires a contractor quickly without discussing w/us, etc. Contractor manages to get significant $ out of the owner before the work is complete, either by getting a large retainer, or overbilling early in the job, or sometimes the client pays 100% up front (don't even get me started on that one...).
Contractor will start the work, and then disappear off the job. The work is probably of poor quality, and certainly not complete.
Here in RI, if the contractor starts the work, then disappears, they haven't stolen the money, they just haven't finished yet. It's an amazing legal loophole that keeps these guys out of jail. Our state board (of contractor registration) is amazingly toothless. It takes a very large number of projects going south for a contractor to lose their registration - and usually they'll just get their wife, girlfriend, buddy, etc, to get a new registration, and they'll continue on their way. The lawyers have pretty much thrown up their hands in disgust - if the client doesn't have the $ (which they usually don't after the contractor's stolen their money..), the lawyer won't go after it...and even if the client has the money, the lawyer recommends that the client cut their losses and move on with another contractor.
How do you deal with this? I've had this issue 3 or 4 times now (luckily, hundreds of successful jobs though..), and it's extremely difficult for everyone. I even suffered through one of my own projects with a "reputable" contractor who almost disappeared. (I'm now a registered contractor myself, so I can do my own work...).
------------------------------
David Sisson AIA
Architect
David Sisson
Providence RI
------------------------------