My $500,000 home renovation nightmare

As I stood in my newly renovated bathroom, watching water spill over the shower edge and flood the room, I alternated between rage and exhaustion. Even with my untrained eyes, I could tell that the lip of the shower was improperly leveled, which led to water cascading to the floor instead of swirling toward the drain. If it was left unchecked, the long-term water damage would be disastrous.

The giant puddle at my feet felt like a watery manifestation of the shoddy workmanship, mounting expenses, and legal battles my husband and I had endured during the renovation of our 1,600-square-foot cottage. What was supposed to be a yearlong $140,000 renovation ballooned into three excruciating years that cost us more than $500,000 — and the work is still not finished.

Our story is not unique. Homeowners nationwide have grappled with similar construction calamities wrought by unreliable and often unscrupulous contractors. The surge in home renovations post-health emergency, fueled by hit TV shows such as "Property Brothers" and "Love It or List It" that make renovations look like a breeze, exacerbated the situation. According to Harvard's Joint Center for Housing Studies, home-improvement spending skyrocketed from $328 billion in 2019 to $481 billion in 2023. With demand soaring, contractors have been in short supply, granting them an unprecedented amount of power. If they leave projects half done or don't do a good job, opportunities still abound and new clients line up at their doors.

In Rhode Island, where my husband and I live, complaints to the Department of Business Regulation surged by 30% from 2019 to 2021, predominantly centered on contractors who accepted payment but failed to complete the contracted work. Between 2021 and 2022, the construction consultancy Arcadis reported a 42% increase in the average value of construction disputes in North America, a historical high. But as my husband and I soon discovered, unless you've made a plan, legal protections for homeowners are close to nonexistent.

When our family bought our 130-year-old property in Northern Michigan in September 2020, we thought we'd be moving in by June 2021. We hoped to use the small cottage as a summer getaway and rent it out for the remainder of the year. We planned to gut it, improve the plumbing, electrics, foundation, and windows, and update the bathrooms and kitchen — a project that several contractors told us should take a year, give or take. Things started out well, but by fall 2021, it became apparent that our contractor had no intention of adhering to the agreed-upon timeline. Our descent into renovation purgatory had begun.

Initial delays were blamed on supply-chain shortages, and while those certainly affected the timeline, we later realized our contractor had misled us about when he ordered supplies and ignored our project for months at a time. The delays were the first of many red flags, yet with a home now ripped down to the studs and few alternative options in the cottage's small Michigan town, we felt powerless to change course.

As the years passed, the budget tripled, we drained all our savings to make payments, and the planned timeline became a distant memory. We felt like the proverbial frogs in the pot of boiling water. Every time our contractor turned up the temperature, we grimly adjusted to the reality of our demise.

We finally demanded to move in during spring 2023. But shortly before, our contractor abruptly requested full payment on all work completed to that date. He threatened to withhold the certificate of occupancy, which is issued by the local government to the building-permit holder and indicates the building is up to code and all the work outlined in the building permit is done, unless we complied. Knowing the cardinal rule of home renovation — never pay in full until the job is over and inspected — we grew suspicious.

My husband and a contractor friend immediately flew in to assess the situation and were horrified by what they found: a botched paint job, improperly installed doors, leaky windows, shoddily installed flashing, and exposed pipes sticking out of the front yard. That's not to mention a long punch list left that included installing storm doors and exterior landings, repairing damaged siding, and covering exposed pipes. Worst of all was the shower that transformed our bathroom into a miniature swimming pool.

We refused to pay, and after requesting complete documentation and accounting of all the work, we noticed significant budget discrepancies, such as gaps between what a subcontractor had billed (for example, $11,000 for framing) and what our contractor said he paid them ($18,000). The paperwork included notarized "paid in full" lien waivers from our contractor and all the subcontractors — documents that said we had paid everything we owed.

So we sought legal recourse, terminated the relationship, and ignored the outstanding balance. Surely, we thought, there must be consumer protections for people in our situation. It seemed like a slam-dunk case: We paid for a service that wasn't finished. A year later, we learned just how few protections existed.

The court dismissed the notarized lien waiver as a mere mistake on the contractor's part. The mediator offered trivial solutions to significant problems — "Take a crowbar, rip out the tile, and relevel the bathroom, no big deal. It's a weekend project," he said, as if we hadn't just paid tens of thousands of dollars for our contractor to do just that. The lack of sympathy from the court — and the fact it would cost us double what the contractor was asking for in legal fees to pursue further legal action — pushed us to settle. We paid the contractor the $32,000 he said he was owed, leaving us with an exorbitant legal bill and no closure. While we were able to move in eventually, we remain trapped in a cycle of endless repairs, gathering quotes to rectify the mess left behind by our contractor's poor work.

We've learned the hard way that your protection as a consumer largely comes down to what you do before the work even starts. After talking with other homeowners, I discovered just how easy it was to get taken advantage of.

Amanda Jane Jones began renovating her Utah home in 2020 with a contractor who came highly recommended by neighbors. Everything went well for the first few months, but then work started to slow down, and subcontractors stopped showing up. Jones had been paying incrementally, which felt safe and responsible. But then her young family's rental home went up for sale, and they had to move out. Desperate to move into the home she owned, Jones wrote her contractor a check for $190,000, which he said was needed to meet their move-in deadline. Then he disappeared. One by one, the subcontractors, who had finished their work months prior and had supposedly been paid by the contractor, began showing up at her door requesting payment.

David Jensen, a New Jersey attorney at the firm Greenberg Traurig, told me the first thing you can do to protect yourself is get reliable referrals for a contractor and check that they're licensed and registered as a business. But for Jones, reliable referrals weren't enough.

"Once we hired a lawyer and they conducted a background check, it turned out our contractor had gone bankrupt several other times," Jones said. "Each time, he created a new company name with only a slight variation of the first. He'd been to court multiple times, but his license was never taken away."

She recommended homeowners hire a lawyer to run a full background check for insurance coverage, complaint history, and litigation records. "He stole over $200,000 from us," Jones said. "We would have been fine if we hadn't written him that last check, but we fell for his trap." Her family was able to move in, but four years on, the house still isn't complete. Because the contractor already had liens against his assets from previous bankruptcies, their lawyer advised against pursuing legal action — there was nothing they stood to gain.

Jensen, whose practice is focused on construction-contract negotiation, also cautioned against paying in advance, especially without understanding how those funds would be used. "Many residential contractors want money up front in the form of a deposit, and they won't take the job if you don't put up money," he said. "Try your best to negotiate the deposit down and to get clarity about what it is to be used for."

He recommended requesting monthly accounting with detailed line items and progress lien waivers from the contractor and subcontractors. "Often contractors are telling you they need the money for your job, but they are using that capital to finish the job before yours," Jensen said. Accounting for every penny spent is a pain, but knowing where your money is going will save you a lot of pain down the road.

That's exactly what Lisa DiAntonio, a homeowner in Andover, Massachusetts, did. Despite completing several home-improvement and renovation projects with her husband over the years, she lacked the confidence to DIY the renovation of her newly purchased 6,500-square-foot home. Their contractor quoted about $1.8 million for the renovation, with $35,000 for demolition. She put down a 10% deposit of $180,000, and the work began in January 2022. DiAntonio noticed that the demo crew would show up for a few days, and then disappear for weeks. Progress seemed slow, and while she was supposed to receive a monthly bill with accounting, nothing arrived for the first several months, despite persistent follow-ups.

"April rolls around, and he hands us a bill for $185,000," DiAntonio said. But according to what had been quoted, only about $90,000 worth of work had been done; the demo alone had been billed at three times the amount quoted. "In our contract, any time something was different than the quote, we were supposed to be alerted," she said. But there had been no warning that the demo was going over budget. Seeing the red flags, she immediately fired him. Because he hadn't followed the contract, they were able to make a clean break and have someone else finish the job. When DiAntonio went to transfer the building permit to her name, she discovered that her contractor had failed to obtain a demo permit.

Ultimately, a homeowner's best protection is a good contract — something we fell short on. Our contract, a mere one-page document drafted by our contractor, provided minimal safeguards and left us with scant legal recourse. If we did it again, we would include rules for how to handle changes to the project, penalty fees for missed deadlines, and clear costs for each job, including labor and supplies. (We discovered our contractor had outsourced much of the work we had paid for him to do himself, effectively double charging us the contractor fee).

Jensen recommended starting with standardized contracts from organizations such as the American Institute of Architects and customizing them to fit your needs. He encouraged including what's called a "right to terminate for convenience" clause, which allows the homeowner to fire their contractor at any time without cause. "At the end of the day, you are at the mercy of your contractor, but this clause is one of the most useful tools I have ever used," Jensen said. "It might not get you your money back or solve all your issues, but it gives you the power to move on from a bad situation."

The home-renovation world is a minefield. Each state has different regulations, legal recourse is slim, and competition for contractors is fierce. The best defense is vigilance — do your research, scrutinize, and demand accountability. In the wild west of home renovations, it's every homeowner for themself.

Christine Chitnis is a photographer, journalist, and author who has written for Condé Nast Traveler, Elle, Vogue, The New York Times, and Travel + Leisure.