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The contractor is only legally obligated to what is written in the contract because it would be difficult to prove otherwise if something goes wrong. It should have the building materials(no markup), estimated time to completion, no sub-contracting allowed, and cost of labor-amoung other things.
They get paid when job is completed, or pay a 1/4 when half is done.
It's easy for them to get a construction lien on the title of your house, but if they lose their buisness licence they'll be back working in a week under their brothers name.
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Meanwhile other things are still happening.
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