I am in the midst of a kitchen renovation at my home. My contractor asks me to make all cheques payable to him. IE for the tiles, for the cabinets and I expect he will ask the same for countertop and backsplash.
Can he insist that the cheques be payable to him or does he have to accept my cheques written to the supplier?
You need to write them to him, not his suppliers, unless that is what he suggests. It is normal for him to manage the sub trades and their invoices to him as well. GC's should supply you with written invoices, payment schedules, HST number and warranty info. Protect yourself and get receipts with signatures and dates. Document everything and you will be better off with paper trails during a reno. If he asks for cash only, that is not normal business practice for most contractors. Easy way of dodging the HST police.
When we do a project for a client, all work to be performed by is billed by us. When we use any kind of rock or quartz for counter tops instead of our own custom counters and backslashes we have two options. (1) we can take the 25% discount our counter top company gives us, mark it up and give the invoice to the customer from us. (2)This is the method we always use, we let the customer deal directly with our supplier and we pass on our 25% discount to them and they are billed directly by our local supplier. With your project I am guessing that your contractor is marking up their work which is the norm for our local contractors. I believe in showing the customer everything is not about money and forward any deals we get to them and allowing them to pay the individual companies separately. The other part is if there is trouble with one of our subs I would try to make things right with the customer, but in the end I gave up my markup from them and feel a limited amount of responsibility for another companies work and because of the quality of the subs we use I have only had to deal with this kind of trouble once in 25yrs.
Some contractors are small companies and their name is indeed their actual business name.
Writing a cheque to their "name" is normal. But you should definitely receive an invoice first along with an HST number on it to be sure it is legit.
I would start there. Some suppliers do not deal with the public so paying them may not be an option.
Good luck Joe!
This should have been specified before the work starts.
If nothing was specified then it should be going to the General contractor, as I assume that the contract is between you and your contractor.
Now in between if things are looking unusual and trades complaining, or GC is not working and behaving normal etc. then you as a home owner have to be careful as if your contractor does not pay to his trades or supplier then they can come and bother you which may not be a good situation.
Even if you pay your GC directly take receipts even if you pay by cheque or email transfer that way you can show to trades or supplier that you have made payments.
Cover your self.
It is uncommon for you to write cheques to suppliers, if you are doing the leg work and going to buy the materials yourself then that is fine, I can tell you however in the long run this will cost you as very often you purchase the wrong material which requires the contractor to exchange product which they can't do as you are technically the original purchase. If you want to write the cheques directly to the supplier because of a trust issue then you have bigger problems and are probably heading down the wrong road
The details of the contract should have been specified before the contract work began. It is a usual practice to pay the contractor who then pays the sub-contractors. I would just make sure that he has proper documentation regarding his business, and that there is an agreement in place. If his company is his name, then all is good, however, you can ask for proof that he has paid his suppliers.
As long as you have a signed contract with the contractor that's mean you have to pay directly to him unless he has a problem with his trades and has difficulties to handle the project, then you have to terminate the contract with him and deal with the trades directly. Meanwhile you have to get a receipt / invoices for all the cheques issued under his name.
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