Sign After You Do This
You’re about to sign the contract your contractor gave you. It seems fine…no glaring red flags and it has the standard ingredients…3-day cancellation clause, payment schedule, detailed description of work and materials, etc.
You’ll be SO smart (and better protected) to include these points in your contract.
- Record what will happen if there’s a discrepancy between your architect your builder. (Each will likely vouch for the primacy of their own contribution while you could be watching finger pointing.) The plans rule. That’s what your city has approved and no doubt you’d rather not go back through the city. Include this in your contract.
- Opt to make each payment payable to the general contractor and his sub (both names on your check) so you needn’t give a second thought to whether or not the workers are paid. (You don’t want them looking to you for what’s due them from their boss.)
- State that interim payments will correspond to descriptive invoices for completed work. And, with each payment your contractor is to provide you an unconditional waiver of release for that interim payment, from both he and any sub-contractors who had a part in the completion of that work.
- A 10% retention clause, applicable to each interim payment, will help keep you in the driver’s seat. Everything can be paid in full at the end of course, but with this, you’re more likely to see quality, on-schedule, on-budget work throughout the project, rather than being at risk of a list of “oops” at the end. Your leverage is greatest when it’s on-the-spot rather than after-the-fact.
- Issue the final payment only upon 100% completion of the job. How will you know you’re 100% finished? When every task on the punch list is done to your satisfaction, you’re in possession of all the inspection reports, permits, material and supply warranties and labor guarantees. And, most importantly, you have fully executed unconditional final waivers of release from your general contractor and every subcontractor who has worked on your property.
These tips are just a few of many ways you can protect yourself in case things don’t go as you’d expected.