What does the payment schedule in your contract dictate?

No payment schedule in our contract we paid the full 15k of the contract up front

How much is left to do?

Finish backsplash finish painting installing flooring installing cabinet hardware putting in cabinet over microwave putting in over range microwave installing baseboards and trim around doors I think he decided he was no longer going to install shelving in our pantry.

If he needs your money to pay his guys ask him how much they get per day and then pay him that per day until they finish or until it adds up to the total (minus the contracted items he's not doing). We had this problem a lot with our contractor, they use your money for other projects and other people's money for yours, he probably ran out and waiting on other payments too. It's insane how contractors refuse to try to manage their money.

Good idea itsourcasa.

He underestimated the job unfortunately.

"we said he would get the final $1300 when the job is complete. He is saying he needs the money to pay his workers. What should we do?"

$1300 to pay his workers? He has 95% of his money by the sounds of it and you may never see him again. Be prepared for that. Not saying I would give him the remaining balance (I would never), just get ready for the inevitable disappearing act.

Unfortunately you don't have any good options now. If he walks off, what is your plan for finishing? How much money and more time with a torn up house are you able to tolerate?  My first question is are you happy with the quality of the work? If so, you may need to find a payment structure and more money so he will finish. If the quaity of work is poor and you have resources to pay another contrctor to finish, let him walk.  Just be aware that it will be quite expensive to bring in someone else unless you know an experienced small jobs guy who could finish this.

Put something in writing- even just a quick e mail summarizing the payments and what needs to be done and have him sign it- a final issues list is very typical so he should not be offended by it. He is clearly bad at managing his $ but its also hard to follow how the 15 became 22 but then you paid for materials on top of that? Was his contract for services only? You can also call your town building inspector for guidance as I would never pay a final if all permits are not closed (are the permits in your name or his?)

shady. He's responsible w/paying his workers with his own money, not gouging you for more.

10-20% up front is customary. another 10- 20 as the job continues. I would never pay more than 50% mid-way through, especially if IM the one buying materials!

paying the whole amount, or 80-90% before job is completed is a recipe for disaster. you know, like you hear about on all these shows where they do crappy, unfinished work, take the money and they're never seen again.

What is in the contract regarding payment? Nothing is written?

You've already given him 22K and you bought materials? what has he done w/that 22K?

4K to change a closet into a pantry? wth? did he knock down walls? get a new door? what is the work of this closet that costs 4K ??

I wouldn't give him another dime until the work is done. You don't pay someone for a job they haven't done yet.

And I think you should be prepared for some really bad news.

Always, always, always, get the payment written in a contract. Change orders, in the contract.

And know, by law, they cannot demand all that money up front. (it's usually 10-20% to start, and if he has to purchase materials, he can charge you as he goes to purchase those items. he can charge another 20% after completing 1/3 -1/2 of the work, give or take. but to pay all of it ? no way. )

Report him to the state licensing board.

Remember the past is exactly that. No use beating yourself up about how you came to be in this position. Yes, you do need to earn a few lessons from the experience but don't get overly upset. At this point, your objective has moved away from paying this guy $1300 and getting a finished project. Objective now is getting this project finished without going bankrupt or crazy or living on a building site for months to come. 
You may choose to go after the contractor when this is finished, if you can find him. Important now to decide if he is dishonest or just incompetent at managing money. Depending on when you signed the deal, the contractor's costs may have gone up tremendously from when you signed the original contract.  He may be dealing with workers saying $5 an hour raise today or I am starting with Joe's Jobs on Monday. Many people have been surprised by how far and how fast prices have risen. 
If you believe the guy wants to get your project finished, he may just be overwhelmed and struggling to stay afloat. If that is the case, work with him to quickly get this finished and off his shoulders.  If you think this is an addiction issue but the work is decent, pay him every day he works. Most of my network have spent many years not working during a pandemic with material and labor being expensive,  difficult to get, and sometimes poor quality.  Some people have adapted better than others to the current situation.

It is completely acceptable for a business to demand payment in advance, that is not the standard model in construction, but it also isn't unusual. You trusted him enough to pay the original contract price up front, if that is the payment method of your original agreement, I am not sure why you feel it is acceptable to change that method.

There is certainly a risk that he will disappear and not finish the job, but that risk was there when you gave him $15k. I would be reluctant to do business with someone like this, but you weren't and I don't know if it reasonable to fix that now. Plus, you really don't have much carrot or stick left.

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It is incredibly common for a business to need customer payments in order to pay suppliers, in fact, that is the standard in U.S. business to business transactions. Customers are sometimes slow to pay, which is why there is a trillion dollar U.S. commercial paper market.

Interesting side note: In the sub-prime collapse the commercial paper market stopped for a few hours. There was just no company that could lend cash at that time. So about 1/3 of major corporations were not going to be able to pay their workers' salaries. The Fed did a guarantee program to get it going again in short order and everyone got paid.

I agree with Beth. If he needs cash flow to pay his people, he should be working out what the payment schedule is for the job in advance and you agree to it together. You've already given him the vast majority of the total payment; don't give him the rest until he finishes. If he walks, then I think you maybe dodged a bullet, because he could just have easily walked away from the job even after you paid him the balance.

Lesson learned: payment schedules for contractors need to be in writing before they start work.

Why would there be a payment schedule when the original agreement was paid in full up front?

bry, the contractor should have his own payment schedule for his men. If got a lump sum of 15K (now almost 22K) and didn't have to purchase the majority of supplies, then why can't he pay his people w/that money? Obviosly the guy is a doof and would rather bilk his customers. Maybe he's using the money for another job. maybe he has a gambling problem. who knows.

He didn't use the money to purchase supplies for this job, so what is the issue with him wanting more money? Yes, the OP made a mistake by giving up a lump sum.

I think an in-depth convo w/this guy is in order. Lets see his invoice. let's see his work order, his itemized account. what exactly did OP get for 22K ?

I would simply tell him, ”Look, Jim, we’ve already paid out a lot of money. And we paid that money in good faith. It is not the money, and it is not that we do not trust you to finish the job - we’ve given you lot of money up front already. But we are just looking for a little consideration from you, in return, now. If you do not want to complete the job, we will have to find someone else.”

And if necessary, I would find a skilled handyman or two for the rest of the job.

1. You don't pay him and he walks. You use his money to pay someone else to finish.

2. You pay him and he disappears. Guaranteed.

Pick one please.

@Beth H. : You said, "If got a lump sum of 15K (now almost 22K) and didn't have to purchase the majority of supplies, then why can't he pay his people w/that money? Obviosly the guy is a doof and would rather bilk his customers."

Puhleeze... I know of a guy who only had $5k and had to pay a $24k bill from a supplier that was already past due. He grabbed the $5k and headed to the blackjack table to win enough to stay in business just for one more week. His name is Fred Smith and the company he was desperately trying to keep going was FedEx.

Please let's not pretend that the merits of any business can be judged from a single cash flow shortage.

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The OP hired a contractor, agreed to pay in advance and now is rethinking that. You can attempt to justify that any way you want but I wouldn't work for someone who played this game either.

Note: before the OP clarified that the contract was paid in advance, I was going the other way on this.

bry, I was merely responding to your comment to OP about the payment. You made it seem like he already used up the cash on her job, for her job. all I said was he didn't use all her money for purchases on this job, so he can pay his own men w/his own money.

Obviously the guy can't manage his money. I didn't know we were talking about gambling addiction, I only mentioned it as one scenario. maybe he has his dealer to pay back. who knows.

The point to all of this is, OP shouldn't have to give him another 1300 bucks to have his guys finish her job that was already paid for in full. (or almost). Until the job is completely finished. she shouldn't have to pay one more dime. they agreed upon a price, she has paid 90% of it, now the contractor can finish it and pay his men w/his own money. If and when it's completed, OP can pay the remaining balance, but not before.

I'm guessing the contractor gave OP some flim-flam story about needing the money up front. Like most people who hire contractors, they are clueless when it comes to scope of work and what is required and warranted for payment. and contracts. It's scary how many POS contractors are out there and take advantage of honest people.

I would die of embarassment if I told a customer I needed their money to make payroll. It's none of their business and not their problem.

Please don’t you dare pay the $1300 final payment. That would be a very bad idea. Let him scream and cry all he wants, threaten to walk off the job, whatever… Sounds like he is planning to walk either way. Keep the $ and if he flakes, you can hire a handyman to finish what is left on the job.

This guy’s behavior is way off for a licensed contractor. They would not ask for final payment until the job is complete. That is standard practice. He is acting fishy and makes me bet he is not licensed.

There are several things you can do, but it all depends on whether he is licensed or not.

Is he a licensed GC? If so, your contract will have his licence number on it somewhere. If he is in fact licensed, you have options if he walks out on the contract.

You can file a complaint with your states contractor’s licensing board. This is that last thing a GC wants. A GC also is required to have a bond. You can file a claim on his bond for the unfinished work and for not paying his subs. This would be so stupid of him. That is why I highly doubt he has a license.

Although, if he really is licensed, one reason you don’t want to make the final payment is because I think that once you do, if he fails to pay his subs, then those subs can file a mechanic’s lien against you as the homeowner. But, it doesn’t seem like the subs could do that if they have not completed their jobs like backsplash tile, flooring, paint, etc. If they are not licensed, they might not be able to anyways if not allowed in your state. You can ask your GC why he would need to pay them if they are not finished? All this is very weird behavior.

Now, if he is not licensed, that is a whole different scenerio. He could be in big trouble for contracting without a license. Some states are super strict on this. He could be fined and might even be ordered to pay you back all the money you gave him. I really have no clue because I don’t know what your state requires.

As I was writing, my GC husband came home. I asked him about your situation and he said, “That sounds fishy. I would never ask for final pmt until the job is complete. This guy sounds like a druggy. I bet he’s unlicensed. Tell them they should be very careful. They probably shouldn’t let this guy back in their home.”

Hope it all works out ok. Your kitchen sounds beautiful with the marble countertops!

$1300 isnt enough to cover all that remains. He under estimated and my guess is he'll walk away from $1300.

If someone tells you I need money to pay my workers before the job is complete especially when they got most of your money, this is the last guy you want on your job.

Around here. Even permit has that in big letters on the back of the card that is displayed.

Hind sight is always clearer. We ( husband and I) always got in writing , the percentage / cost of the upfront payment to start the job, and final payment when the job was completed. This should be discussed/ negotiated verbally and then finalized, in writing, before any job is started. We did this with all our craftsmen. We were the GC for our home renovations. We thoroughly researched and Interviewed all craftsmen, their experience and licenses, read their reviews,and looked at pictures of their craft. We had wonderful outcomes with all our “hand picked” craftsmen!!

Why would you ever agree to pay full up front. IMO once the money is paid there is no incentive to finish or do a good job. Lesson learned and BTW IMO you did not do the checking of references either or a red flag would have gone up.IMO I pay for materials and a stepped payment schedule for the rest and how did 22K happen since the only add on I see is 4K that is 19K in my math.