Working with Contractors Part 2
In my other blog, I covered the first part of working with Contractors. It would be a good idea to read that as well.
STICK TO THE BUDGET
It is super easy to get carried away with all the extras that could be/ should be done “since you are doing it anyway”.
This is a classic thought process and a surefire way to get in over your head. Adding items can add up and they were not part of the original contract. If you are planning to just do floors and paint, stick to your plan. Make sure that in your interviews you have asked enough questions to ensure that this topic doesn’t come up.
If you are painting, ask what is included in that whole process? Ask what would be an “add on”, while you are doing the interview so that you can decide how far to take it, before the work starts.
You can expect 10-20% on top of your original quote for contingency funds and unexpected issues, as their always are!
Quotes should include material, fixtures and labor that will be required to complete project to the specifications. It should also outline who is buying and delivering these items to the site, who cleans up and who pays for clean up.
Have Detailed Contracts
How detailed? So detailed that if, God forbid, all parties in the contract passed away, a lawyer could easily and plainly see what was to be done and what stage money was payable. And what money was already paid. A contractor that balks at this idea is not one that you should hire. Contracts protect all parties so if they are unwilling to sign something or create a contract with you, then re-think hiring them.
Property damage Insurance, as well as a valid Business license. Take the time to verify this.
Call their references and check their experience, including social media profiles
Are they are able to obtain any building permits if required and are they are knowledgeable about what is needed? In some cases you as the home owner can also obtain the permits yourself.
Money has to leave your hands at some point so planning a schedule for this is a good idea. Typically, a 30% deposit is paid, then 30% when 2/3rds of the work is done as outlined on the contract and the last 30% when the final day is complete with a 10% holdback for you to have sufficient time to confirm all projects are in fact complete. Call Service Alberta if you have further questions about contracts.
Another option is that contractors will work all week and invoice for the balance owed that week. This is a good system that is trackable and also prevents further confusion on the invoices weeks later when time has passed and it is uncertain what transpired on the day in question. It allows you as the home owner to see progress and the time things take, pay as you go, and keep yourself on budget.
It is also beneficial to the contractor as they are paid regularly and this alleviates the stress of buying materials and also paying their own bills. They are people too and they often have families to feed also, so this is a very good way to work out a fair and equitable plan for everyone.
During the process
Supervise your contractors
Be there daily so you are well informed. We offer trade management as a service within our staging company if you prefer that option.
A professional is happy to answer all questions
So ask questions, there is no dumb question when it comes to your money being spent.
Never pay for more than has been completed
Depending on the business deposits may be only $500.00. Progressive payments are usually agreed to on a contract, but what can end up happening is that you pay your progressive payment and the work is not actually completed to that point. If you are new at this, this will be a problem and some contractors can smell new blood a mile away.
So again, be clear on the contract and have it reviewed by a lawyer if necessary. A common issue that occurs is that a contractor has worked all week at your house and the completion level is not where it should be, or has run into legitimate issues that held up the progress. At the end of the week, they want a progress payment and the work is not done to that degree. Do you pay? What if they tell you that their rent is due? Or their kid’s soccer dues have to be paid and they promised to pay it today? Do you pay? What if they say they will come back tomorrow (Saturday) to catch up…do you pay? The answer is no. NO.
This always causes tension and if you pay for incomplete work . You will lose in the end when you have paid for more work than has been done and they are now telling you that you owe more than you agreed to pay, and unless you pay they will not finish the work. This is a difficult predicament to be in and it does happen, so research, interview, have an ironclad contract, get legal advice and be prepared to stay on top of all this.
Mandatory holdbacks are required in the province of Alberta
This is not optional. You are legally required to keep 10% of the final pay back to allow time to ensure project is complete to your contractual agreement. Typically you can review your completed project with a few days and then if there are issues, they must be resolved before the final 10% is paid. Contractors may pressure you to give it to them with promises to return to complete items, do not give it to them. Sob stories are for Disney™ not business!
- Be aware of a contractor if they request large deposits, or cash only, or payment in full upfront.
- Be aware if they do not charge GST or have a business license
- Be aware if they are too vague or do not want to put details in a written contract
- Be aware if they have no only a box # for an address and no physical location
- Be aware if they want you to obtain all permits and do not want to be involved in that process
- Be aware if they pressure you to decide now or offer you a discount for a “now” decision
- Be aware if they have answering services and do not use their own phone numbers for contact
Although this may sound scary, I am not trying to scare you from using contractors. Most are fantastic to work with. I am trying to inform you on what can and does sometimes happen, so that you can prepare yourself fully and come out of this process unscathed.
Most often working with contractors, although stressful due to the nature of the projects, is usually a great learning experience and a rewarding time to see your vision come alive. Property improvement, even if you are moving, always carries its own rewards.
For more on this subject and 95 pages of Staging advice, checklists, photos and more….get your own copy of my eBook and get in control of your selling process
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