Hello,
I finally got to creating a contract for my small carpentry business in Ontario. I never used a contract before and provide quotes by email or by itemized invoice. I guess I got lucky and got burned only once in 15 years when renovation contractor disappeared without paying his trades.
I got a contract template online, there is a clause about 10% hold back for home owner contractor and subcontractors, like a pyramid, everyone holds 10% for number of days in case there is a lien. I never even heard of something like this.
Do you think I should just delete this from my contract. This will add a lot of accounting work trying to trace every payment. What about small jobs under $1000.00, would you leave 100 to the home owner, hold 90 yourself and let your helper hold another 20?
Thanks for input.
Hi Max
Here are a couple of guides for you concerning your questions.
If unsure always consult a lawyer with construction knowledge.
https://www.chba.ca/CHBA/Renovating/Contracts.aspx
https://www.chba.ca/CHBADocs/CHBA/Renovating/A-Homeowner-Guide-to-Renovation-Contracts-CHBA.pdf
Cheers
Dave
To my knowledge a 10% hold back is not mandatory for all construction contracts. It really depends on what type of contract you and your contractor have entered into. If it is a CCDC2 Stipulated Pricing Contract, then a 10% hold back is required. Again, if you don't enter into a CCDC contract or a contract that specifically calls for a 10% holdback, than one is not required.
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