Multiple Sequential Contracts With A General Contractor ?
10/27/2013 at 5:23:00 AM
I am in the process of looking for an honest, reliable and reasonably priced GC for a major reno (around $100K+ and this is my first one), but having read the "horror stories" from both owners and contractors I was wondering if the following example could help resolve payment and workmanship problems :
After a GC writes down the timeline and total cost for each major part of the entire job (e.g, gut, rewiring, plumbing, insulating + drywall etc.)., both of us negotiate 10 detailed contracts (for argument sake) in sequential order that represents the entire job from beginning to end. We will both only continue to sign the next contract when we are both satisfied (i.e. GC and subtrades are paid in full and owner is happy with progress and workmanship) with the completion of the present contract.
Therefore, wouldn't the above process minimize the owners loss and regret if they chose the wrong GC (even after thoroughly examining the GC references and credentials)???
Any comments or suggestion would be much appreciated.
Thanks in advance.
10/27/2013 at 11:29:30 AM
Hello Ki,
That is an acceptable approach in order to ease any concerns regarding your selection of a honest, reliable contractor for your renovation project.
Best Regards
Randy Baryla
President
The Renovation Company
10/27/2013 at 11:40:18 AM
This is an acceptable method of doing business. I like to work with clients who understand the job, and what is needed to be done, along with the cost of the each job. Do keep in mind, some of the "horror stories" often begins when communication brakes down between the GC and the owner or when promises are broken. Also, issues may arise when the work is underway. Once you start opening up walls, you may run into issues like old, or improper wiring, same for plumbing, or even structural issues. These are often unaccounted for, until the can be seen.
As a contractor, I always try to keep my clients informed at least every couple of days. I encourage you to visit your job often, and don't be afraid to ask questions. Your involvement is important.
Do plan ahead, the good GCs are often busy for 2 or 3 months or longer.
Good luck
Steve Rose
Rose Home Renovations
10/28/2013 at 8:03:55 PM
Hi Ki,
Sounds good. The reason many jobs fall through the cracks is lack of communication between contactor and client. Follow your gut and educate yourself through out the project.
Good Luck!
10/29/2013 at 8:01:43 PM
Hi,
I see no problem structuring the contract as you suggest. I have had similar contracts in the past on commercial projects.
Aside from the structure of the contract and the credentials provided. Do you feel comfortable with the contractor? I believe in word of mouth and referal. If these are not options for you, this site can be very helpfull. But do ask the person you are dealing with for some referals or job sites you can see.
I have many clients in the past that have been happy to let me show a new client something we have built.
Again, trust your gut instinks, are you comfortable with the contractor you are negotiating with?
Hope I have been of some help.
Regards,
James Fram
10/31/2013 at 4:23:14 PM
I agree that this is a fair way of doing the contract. You work with your GC for a long time and you speak to him/her almost everyday. The first thing you want to be sure of is that you feel comfortable with them. A good GC will sit with you for hours and talk about what you want and what your vision is. The progress payment plan is usually a safe plan to go with as it gives you the chance to stop the process when/if needed.
11/10/2013 at 3:45:20 PM
Hello Mr. Ki,
The suggested procedure is a fair deal for all parties involve if a exit strategy is initially stated in the drafted contract.
Thank you!
Sudha Halder
Management Build Canada (MBC) Inc.
1/13/2014 at 12:15:51 AM
Hello Ki,
I am a General Contractor. Best way to move forward is to have an open communication between the owner and the GC. Issues mainly arise when suddenly the GC comes across hidden challenges when the walls are opened, or when the owner wants an upgraded requirement to the earlier priced which was for the basic. My sound advise to you will be keep 15% aside for the additional unseen challenges you might come across or an upgrade you would like to do without eating into GC budget and all will end well for you.
Regarding paying the GC. We usually like to order our material and anchor our trades well in advance for the project. This way all material is ready for the trades before they arrive to site and the job gets done as scheduled. The GC works starts way ahead of the initial construction, the planning, scheduling work, scheduling trades, ordering and alligining material and rest of the stuff. For this we usually collect almost 50% in advance so that all the material is taken care of and is on site. The payment schedule and deliverables are usually spread out as per the work executed so that you as the owner is covered in terms of payment. The trades are also payed in stages as the job progresses. This way its almost is parallel to $ value to job completed for GC as well as for the trades on site.
The payment process is spread out along with the GC payment and material at every stage of the construction process. I dont see at any given stage an unreasonable bulk payment is collected unless its a ripoff artist.
We build Custom homes in downtown area and do a lot of renovations. But there are always minor challenges between the GC and the Owners which are usually ironed out with least bit of effort. Over cautioness also kills the trust and put unnecessary barriers. Both the parties must be at ease at all times.
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