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Your contractor took the deposit and disappeared

Send a dated, written demand for the work or the refund, report it to your state's contractor licensing board, and look into small claims. If the contractor was licensed, your state may have a recovery fund that pays homeowners back.

A homeowner lost $12,000 to a contractor who disappeared, and then couldn't even get him served with the small claims papers. Another paid a $3,200 deposit for a fence with a set install date. The date came and went with no contact.

First, is it gone or just late?

Some contractors who go quiet are overbooked rather than gone. Send one last written message with a date: "We paid a $3,200 deposit on March 3 for a fence to be installed on April 10. Please confirm a start date by April 24, or refund the deposit." It gives them a chance, and it gives you a record.

If there's no answer

  1. Report it to your state's contractor licensing board and the attorney general's consumer protection office. Boards can discipline licensed contractors, and complaints show a pattern.
  2. Look up your state's recovery fund. Several states run one for homeowners who lose money to a licensed contractor, including Maryland's Home Improvement Guaranty Fund and Florida's Homeowners' Construction Recovery Fund, and Washington's Homeowner Recovery Fund is newer. They usually require the contractor to have been licensed, and some require you to win a judgment first.
  3. File in small claims if the amount fits your state's limit. If you can't find the contractor to serve them, ask the court clerk what other service your state allows.
  4. If you paid by credit card, ask your card company about a dispute for services not delivered, and do it quickly.
  5. If it looks like fraud, report it to the police as well.

For the next job

Check the license before you hire. Keep the deposit small; some states cap it, California at $1,000 or 10% of the price, whichever is less (CSLB), and Maryland at one third. Tie the rest of the payments to finished stages, and pay by a method that leaves a record.

This is general information, not legal advice. States differ on what a home improvement contract and its changes must contain. Check with your state’s contractor licensing board or an attorney.