The $10,000 Lesson: Vet Your Contractor Before You Pay

Dear Kari, I hired a contractor for an apartment renovation. He seemed capable, confident, and ready to start. I handed over a large deposit and then he vanished.

No work. No updates. No materials. Just silence.

Alex

It was a costly mistake, and one that’s all too common. In property management, trust isn’t earned just through conversation and a handshake, it’s built through documentation. Before you hand over money, access, or control, you need to verify who you’re dealing with and protect yourself with clear, enforceable protocols. Because once the money’s gone, so is your leverage.

Referrals Aren’t Enough, Do Your Homework

• A glowing referral from a previous job doesn’t guarantee reliability on the next. Different scopes mean different pressures.
• Always look up their license, insurance, and online reviews. Yelp, Google, and contractor boards can reveal patterns, especially unresolved complaints or ghosted jobs.
• Ask for photos of recent work, not just testimonials. If they hesitate, that could be a red flag.
• Get it in writing, their proposal should be clear and detailed.
• Obtain more than just their bid (usually 3) before deciding to move forward with any vendor.

Never Pay More Than $1,000 Upfront

• In California, contractors are legally prohibited from requesting more than $1,000 or 10% of the job cost (whichever is less) before work begins.
• If they ask for more, walk away. A legitimate contractor should have the financial stability to start without draining yours.

Owners Should Control the Supplies

• For small renovations, owners should purchase the materials directly. This prevents markup games and ensures delivery to the right unit. So even if the contractor never shows up, at least you have the supplies to continue.
• Use your vendor accounts or retail options, and have everything shipped to the property. You control the timeline, the quality, and the cost, and you won’t be chasing receipts later.

Never Hand Over Keys Without a Signed Agreement

• Contractors should not have unrestricted access to your units. If access is needed, use a lockbox with time-limited codes.
• No written scope? No timeline? No payment schedule? Then no keys. Period.

Trust Is Earned Through Process, Not Promises

A confident pitch and a friendly demeanor don’t guarantee follow-through. Contractors can talk a good game, but without systems in place, your property, and your budget are exposed.

Before you hire anyone, whether it’s for painting, plumbing, roofing, or renovations, run through this checklist:

• Have I verified their credentials and license?
• Do I have a signed, detailed scope of work?
• Am I controlling the money and purchasing the materials?
• Is my access protocol secure and limited?

If the answer to any of these is “no,” stop. You’re not ready to hire, and they’re not ready to work. This isn’t just about being cautious, it’s about being smart.