What to expect when you deal with a contractor

Congratulations!  You’ve found your contractor!  You are on your way to a better home!

Not exactly as shown

What can you expect from your contractor? And what can they expect from you?

Contract.  A contract guarantees both parties know what is expected of them.  You get the assurance that the job will start on a certain date and will be finished by a certain date for an agreed-upon price.  There are several types of contracts, fixed-price, lump sum, time and materials, etc., plus various combinations of them.  Here’s an explanation of the different types and their advantages and disadvantages.  Depending on the size and complexity of your project, the contract can be very complicated or quite simple.  The important thing is that you HAVE a contract.  You should both know exactly what is being built and what is expected.  Read it, go over it line by line with your contractor, so you know exactly what you are getting.

The contract will also show that your builder has insurance, and will lay out the liability limits.

Permit.  If a contractor tells you they can do a job without a permit, think hard about hiring them.  If there will be any changes to the outline of the house (a deck, for instance), if there will be any changes to interior walls, plumbing, lighting,  make sure your contractor is doing drawings and pulling permits.  Yes, it costs you money.  Yes, it can be frustrating when the project is held up waiting for an inspector.  But permits are a guarantee that someone is watching your project.  Benevolently.  From above.

Deposit.  It’s customary to give your contractor 40% of the project fee up front. Then, when you receive the invoices for the work done (the scheduling of the invoices should be laid out in the contract), the invoice will indicate that 40% of the costs have been paid.  So if you get an invoice for $100, you will pay $60 of that, the remainder having been paid by the deposit.

Holdbacks.  These sound simple but are complicated. If your project costs more than $100,000 it’s mandatory for you to have a holdback account, where 10% of each payment you make to the builder is put aside in an account and held there until 55 days after the contract’s end.  This is to protect you — you can hold back that money if the job isn’t done to your specifications (thus “holdback” account).  It also protects the sub-contractors and suppliers because they can apply for some of that holdback money if the General Contractor didn’t pay them. It’s up to you and your contractor to include this in the contract, so talk it over with them.

Schedule.  Your contractor should indicate what job is done when.  The schedule has to have some flexibility built in, because there will be external forces at work to screw it up, whether it’s a storm that holds up deliveries or one of the aforementioned inspectors who’s sick that week.  But you should have a good estimate of who is supposed to show up when, and as the project nears completion you should be given a firm date.

Meetings.  The contract should set a schedule for meeting with the builder/contractor.  You should get together at the project once every two weeks to go over what’s been done and review any problems that have come up.

Good communication.  You should be able to reach your contractor between meetings to ask any questions you may have.  And they should be able to reach you! Problems may arise that have to have a quick answer.