Can a homeowner hold back part of the final payment?

Work it through

You're the contractor. Pick what you'd do, then see how each choice plays out.

1. ARefer to your contract's payment terms. The final payment is due upon completion and inspection. Offer a formal punch list walkthrough — if there are legitimate concerns, document and address them. But 'just in case' is not a contract term
   Correct

   Your contract specifies payment milestones. If the final payment is due at completion and inspection, it's due now. A vague 'just in case' holdback is not a contractual right. However, the professional approach is: conduct a formal walkthrough, create a punch list if items exist, fix them, and collect payment. If the homeowner has no specific concerns but simply won't pay, your contract and small claims court are your remedies.

2. BAccept the $2,000 holdback — it's easier than fighting about it
   Sets bad precedent

   Accepting a holdback without contractual basis teaches clients that final payments are negotiable. If you routinely let clients hold back 15-30% 'just in case,' your cash flow suffers and it becomes expected. Better to address it professionally: walkthrough, punch list, resolution, payment. Your contract is the agreement — enforce it politely but firmly.