Contractor finished work May 2007. Failed plumbing inspection. Wants to come back in Nov 2009 to finish. I owe 10%. Do I pay?

As a very general rule, you do not have to let the contractor finish the project and are not subject to any liability for failing to allow him or her to finish the construction project. This could potentially be changed by the specific terms of your contract. Again, subject to the terms of your contract, you do not have to pay him the contract balance. However, you must still pay him any balance that is owed for work that was actually performed. Since he has not been involved on the construction project for 2 years his time to file a mechanic's lien against your property has expired but he could still potentially sue you for the balance, if any, that is owed. Also, if you are forced to pay someone else to finish his work, and your completion costs exceed the costs that you would have had to pay the original contractor, you may have a claim against him for the difference if you can establish that he breached the contract (for example by abandoning the project for 2 years). I would suggest that you consult with a local construction attorney to discuss the specifics of your case in order to obtain the proper legal advice.