Trends Exclusive: ‘Rico to the Rescue’ Reveals the Biggest Mistakes Homeowners Make With Contractors

Nearly every homeowner has run into problems with a contractor at some point—and a new HGTV show delves into what goes wrong, and how to keep a renovation on track.

On “Rico to the Rescue,” Denver-based builder Rico León helps homeowners and the general contractors they’ve hired mend fences. If a conflict can’t be settled, León and his crew take over.

Interested to hear how to resolve a clash with a contractor (and protect money involved), we got León to share his best advice for calling out and holding the contractor accountable. Plus, he shares the biggest red flag to look out for during the hiring process to avoid a problem in the first place—as well as his favorite renovation in his own house.

Have you ever had a bad experience with a contractor?

I had general contractors that worked under me that were stealing hundreds of thousands of dollars to work on other projects. When they started doing bad work, I was giving them less and less work. And they knew it.
What’s the most common issue homeowners have with contractors?

It’s language—the homeowner and the contractor speaking different languages.

When the contractor’s selling, they’re saying what a homeowner wants to hear, not the good, bad, and ugly of a construction job.

They’re like, “I’ve been doing this 30 years. I’m amazing!”

As a homeowner, you’re like, “The value of my house is going to skyrocket!” And you sign the dotted line.

I think the communication is skewed because the contractor needs to tell the homeowner, “We’re going to be ordering these materials. Sometimes these materials could take this length of time,” so the homeowner can understand things before, all of a sudden, nothing’s happened in three weeks.
What red flags should homeowners look out for to weed out problematic contractors?

If they’re telling you too much good, it’s a red flag. If they say everything’s going to be rainbows, assume they’re a sales guy.

A thing a lot of homeowners don’t understand is when they hand [over] a check for $150,000, they should get conditional lien waivers making a statement that they’ve paid that contractor. Because what happens is contractors [may] mismanage the money and not pay their subcontractors, and their subcontractors would put a lien on your house.

There’s things you could do to prevent things like that—the biggest is milestones.

Tell the contractor, “Where is the first milestone? Once you hit that milestone, I’ll hand you another check,” and it needs to be agreed upon first. If he or she says, “The same doors you wanted just increased in price,” [the contractor must] prove it to the homeowner. Sign a change order that you both agree to, order the doors, and move forward.

 

How should homeowners pay a contractor to protect their investment?

It’s hard because people do things differently: 50-50 [or] 30-30-30-10, it depends on the size of the job.

I’m going to say, how quickly do you want us to do the job? The first check is going to pay my mechanical, electrical, [and] plumbing guys half down so they can start buying materials, start getting demo done, start pulling permits.

If you want to be back in your house in four months versus 12, if you give 60%, we’re going to use this amount of money to order the materials now because sometimes cabinets are three months out, sometimes windows are six months out.

You have to be very descriptive on how [contractors] are going to start using the funds and how quickly [homeowners] want the job done.

How I like to do it, if a job is $7,000, I tell the contractor, “I’ll give you $1,000 for every day you’re here.” That makes that person hyper-concentrate versus come in here, dilly-dally, and then leave. It gets them moving, and sometimes they’ll get it done quicker.

 

What are your top tips for confronting a contractor when things go south?

I love that you use the word “confront,” because that’s how things go even worse. Just like arguing with relatives or a spouse, tone is everything.

If I’m screaming, you’re going to be defensive. When things start going south, the best thing to do is say, “I was expecting this job to go a certain way. Can we all sit back down and plan out from now to the future how it’s going to look? And if things are going to take a long time, let me know ahead of time. Communicate with me.”

Use that tone, because the last thing you want to do is have them be defensive, and then guess what? Liens. Not a good solution.

Having a third-party [contractor] for a few hours is 100% worth it because sometimes you don’t understand, and sometimes contractors are not good explaining it to the homeowner. If you have someone you would pay for one day that can mediate, he or she could say, “This is happening nationwide. This is normal.” Or that third-party contractor could tell [your] contractor, “Lumber doesn’t cost that much. Where are you getting your lumber from? Did you file for an inspection? Can you prove it?”
What’s the best technique for holding a contractor accountable?

People get annoyed and then they start pointing the finger. Having a hierarchy tree of who takes care of what and what their responsibilities are puts the accountability to the contractor. The homeowner also needs to be held accountable. Having that laid out in the beginning is so nice. It’s not the most fun conversation, but it prevents headaches.
When is it worth it to cut your losses and move forward with a different contractor?

It’s a headache-to-income ratio. Think of all the time, energy, and value of the house you’re losing because you want to have this battle. It’s just math. Sometimes you can file a claim against their insurance and get some money back. If you go legal, you’re going to lose money, you’re going to pay a lawyer. If the [contractor] took money from you, he probably doesn’t have money. So when you sue this person, they close their business and start another one the next day. I try to avoid that at all costs.

 

What’s the worst state you’ve seen a contractor leave a job?

I’ve seen contractors get $300,000 upfront, put $50,000 into the project, and ask for another check. That is where I get really angry. They use that money to do something else [like] buy a truck, vacation. But let’s prevent those things from happening by saying, “I’m only going to give this much money. We can put things into an escrow where the mortgage company or the bank can divvy out certain amounts. They can do an inspection.”

You’re adding another third party to control the money so you don’t get screwed.
What’s your favorite renovation you’ve done for yourself?

My own closet, making it 10 times bigger. It’s kind of my own little oasis. I like my bathrooms warm, so I have heated floors, heated toilet seat. I have a steamer. I host a lot, so having a nice kitchen with the wine rack and all that kind of stuff are my favorite things personally.
What in your own home needs rescuing?

My water heater busted! What sucks is, since I have to redo the floor, all the furniture in my house has to be put away. They put new flooring, sand it, and repaint it, and then my furniture has to come back. So right now there’s this area in my kitchen that’s cut out from the water damage, and I just have not gotten to it yet. It’s such an eyesore.

“Rico to the Rescue” airs Saturday nights on HGTV and is now streaming on discovery+.