First, don't worry about the threat of any lien. If the contractor were to place a lien, he would not be able to do anything with it unless he filed a suit and prevailed in that suit. Given your facts, he would not prevail, and the court would simply order the lien released. And, if the contractor doesn't timely pursue the suit, the lien will lapse automatically. It's the contractor who is in default here and you are the one with the recourse. What you want to do is raise the stakes on him. First, get an estimate from another contractor of the cost to properly complete the job. Then, send your existing contractor a certified, return receipt requested letter detailing the history, terminating the contract due to his default, and demand that he pay you an amount of money so that when the other contractor completes the job, you have paid in total no more than you would have paid him had he completed the job competently. Inform him that if he does not comply with your demand within a short specified period of time, you will have no choice but to file a suit against him for your damages. BUT, be sure to specifically mention that you will be filing this claim not only as a breach of contract case, but also as gross negligence, fraud, and deceptive trade practice causes of action, which will entitle you not only to your damages, but also an additional amount equal to multiple times your actual damages as punitive damages. That should provide plenty of incentive to comply with your demands; but, if it does not, file your suit. Even if you have to file the suit, that's likely all you will need do. In my experience, he will settle this without a hearing rather than risk punitive damages and the judgments being on his record.
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