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3 Fixes for Your Contractor Stealing Your Deposit

3 Fixes for Your Contractor Stealing Your Deposit

Now what?

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Remodel School
Jul 12, 2025
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3 Fixes for Your Contractor Stealing Your Deposit
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“Everyone has a plan until they get punched in the mouth.”
— Mike Tyson

You work. You save. You remodel. That’s how most people do it.

This seems like a straightforward plan (until your contractor runs off with your deposit).

Most homeowners will use savings to pay for their next project.

Two Wrongs Can Make a Right

About a month ago, a long time member of the audience reached out because their contractor refused to finish a kitchen remodel despite being paid $10,000 upfront.

  • The remodel was un-permitted

  • The contractor was un-bonded

  • The homeowner had a big heart

After asking a few questions, I suspect there was an avoidable reason this project went off the rails.

Believe it or not, at least half the kitchen and bathroom remodels in the US are (probably) un-permitted.

What I’m about to tell you is not legal advice. This is for entertainment purposes only. But if I’m speaking candidly, you either pull no permits, or all the permits. Anything in between and you’re a dead man walking.

The contractor (we’ll call him Mr. George) did satisfactory work for the homeowner previously. But it sounds like he was the low bidder for this kitchen and not legally residing in the United States.

So when the spouse insisted the remodel be permitted after paying the contractor the deposit, this escalated to a self-inflicted no win situation.

My work van.

Why Does Your Contractor Need a Deposit?

When I was growing up my parents got ripped off by a flooring contractor who went out of business before installing the floor. And to this day (a couple decades later) their basement laundry room is still painted concrete.

I’ve been the contractor who gets called after the first contractor they hired took the money and ran.

And I hear about this issue on social media from my audience every once in a while.

But your contractor still needs a deposit. Often jobs require ordering materials weeks and even months in advance. Those materials don’t order themselves. And you are not your contractor’s only customer. Your contractor is not a bank.

In case you missed it: revisit my 10 Rules of Construction post

One of the many reasons as many as half of contractors go out of business within the first 3 years is they never charge enough the break the cycle of robbing Peter to pay Paul to stay in business.

And my guess is that was the case with our friend Mr. George. I’m not going to jump to the conclusion he’s a bad guy or that he would’ve done a bad job, but I will jump to the conclusion he already spent a lot of that deposit money.

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