Firing a contractor and estimating appropriate payment
Unfortunately, I have to begin my first post here with a rather negative one. I think my situation qualifies somewhat as a disaster, so I think this forum applies =)
It turns out that the contractor I hired is totally incompetent in plumbing and electrical work. Both plumbing and electrical rough-in inspections failed--twice! The electrical contractor actually cancelled his permit, saying that he's not qualified to do the job.
My project involves: 1) converting half a garage into a new bedroom, and 2) converting a closet into a new bathroom. I thought the project is pretty simple; all the electrical/plumbing lines are exposed. I'm not doing anything fancy; just basic plumbing and electrical. No underground work. No outdoor work. I am dumbfounded as to why he cannot get the most basic things right. Some of his electrical work is downright dangerous.
On the other hand, his framing work seems fine. I think his finishing work is also fine. (My coworker referred him, and he used him twice on his two houses; I visited them both, and find his work good. That's why I hired him.)
We are at the stage now where the framing, rough-in plumbing, rough-in electrical is basically done (but not passing inspections). For the electrical work, I think only some minor fixes are needed at this point. For the plumbing work, we might have to relocate a vent. So it's not like everything needs to be redone. He cannot be on the electrical permit any more, so we either have to find an electrical subcontractor for him, or I get a homeowner's permit and do the work myself. In any case, I cannot trust him to touch any electrical work at this point.
My payment schedule was divided into 4 stages: 1/4 at start, 1/4 after 2 weeks, 1/4 after 4 weeks, and 1/4 upon completion. So far, I made 2 payments (or 1/2 the project cost). Our agreement (which we've both honored) is that I would buy all the custom materials (e.g. faucets, fixtures, valves, sinks, toilets, bathtubs, etc, etc...) while he is responsible for all the basic/building materials (2x4's, pipes, wires, etc.). I also paid for all the permits (which is a mistake in hindsight).
My dilemma here is:
Should I fire the contractor? And if so, is my payment about right? i.e. do you think that 1/2 the project cost is fair for completing framing and (flawed) rough-in plumbing and electrical?
Because I have visited my coworker's two houses, and I am reasonably pleased with the results, I think I'd be ok with his finishing work. But, if I let him continue the work, we'll have to hire an electrical (and possibly plumbing too) subcontractor; I'm thinking that I'll have to deduct that cost from the remaining payment, and I'm worried he might do a sloppier job because of that.
On the other hand, hiring a new contractor at this point is quite difficult--it's spring time and everybody is booked. I'll probably have to wait months.
Any advice would be greatly appreciated. Thanks!