Can a General Contractor do the work, collect a wage, and a management fee on his work?
This could happen what agreement you have with contractor.
I had to worked on one project like that. Initially gave an estimated cost on a renovation project started as general contractor it was more then 80 years old home, with number of owners changed and several modifications were done by previous owners with no past records or drawings.
We all knew there are going to be surprises but they were beyond imaginations.
We started demolition layers after layers on walls and ceilings. When we started removing floors it was having 3 3/4" difference from one end of house to the other. Immediately on 2nd day of demolition home owners and myself decided to convert the contract into management with labour + material as per actual and then 20% for management charges. All parties agreed and project was completed it worked in good favour of home owner and I just finished with little $ for my efforts but just wanted to have it done and not to leave home owner in middle of the situation. If I have to do it again on management then would not do it for less then 30% on a project less then 100000.
To answer your question, this is how a General Contractor should work. He will provide you with a set price, not an hourly wage, that price should include material, labor cost & management fee.
If he is doing the work himself & managing it, it is still something he can do because labor cost & management are different. One he is being paid for the renovation/skilled work performed in your home, management fee is coordinating with other sub-trades like plumbers, electricians so you don't have the headache of looking for one, submitting permits to the city, answering any questions you may have regarding the project either via phone or email. Meeting up with the client for material selections & so forth.
We are a medium sized company here at Dream Touch Renovations & our management fee is 5%. Bigger companies like Oakwood, OGC will most likely have a higher management fee. If the contractor is a small company, ex: father & son company & there not a reputable company offering warranties & such, they should not be charging you management fee in my opinion.
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