Find out how to Pay a Contractor

June 6, 2016 Facebook Twitter LinkedIn Google+ meat stock

Relying on the character of your private home project you may want to determine a payment schedule with your contractor.

A fee schedule is a written doc that states when you’ll make payments to the contractor at sure phases of your project. Payment schedules are frequent for large jobs in order to allow the contractor to purchase materials and pay workers throughout the course of the work. A cost schedule may also merely state that payment will be made in full on the completion of a small job.

Do not let a contractor talk you out of needing a written fee schedule. A cost schedule ensures everyone is on the same page as well as protects you from paying for work that has not been performed. It additionally serves as motivation for the contractor to complete their work in a well timed fashion.

Listed below are a few recommendations on developing fee schedules:

• At all times get cost schedules in writing. The greenback amount and timing of payments needs to be clearly written.

• Be wary of contractors that ask for a big upfront payment. They could have monetary problems or be nervous that after you see their work you will not be happy.

• If you’re hiring a contractor for an extended, expensive job it’s possible you’ll need to get some proof that they are in good financial standing. An instance of it is a reference letter from their bank. This helps ensure that the corporate is able to pay their payments and their subcontractors throughout the course of your job. This is an important step in avoiding a nightmare contractor state of affairs!

• For giant projects a typical fee schedule is as follows: 10% at contract signing; three payments of 25% spaced evenly over the project’s duration; the final 15% when the job is TOTALLY completed.

• When deciding on payment timing you’ll be able to specify a date, however more importantly be sure that work milestones are specified too. In other words, one thing like: “25% of total on July 23 if rough plumbing is completed, electrical is installed, and flooring is accomplished”. This ensures you’re paying for work to be achieved in a well timed matter. Don’t pay on the date unless the work is completed.

• STICK TO YOUR PAYMENT PLAN. Over the course of an extended project you’ll get to know so much about your contractor. Chances are you’ll even grow to be friends. Nevertheless, don’t ever allow them to speak you into an early payment. Don’t pay them on a specified date if their work shouldn’t be following your cost plan. It is a BIG MISTAKE that trusting owners typically make. You NEVER want to get right into a situation where you will have paid for more work than has been accomplished. If you do, chances are you’ll find yourself waiting for the contractor to complete work…however they haven’t any motivation to complete because they have already been paid! This may result in a nightmare of a situation.

• Give the final fee when your closing checkrecord is TOTALLY completed. The small details might never get accomplished if the contractor has been paid in full…they have moved on to the subsequent job.

• By no means best pay contractor the contractor until the work is satisfactory. We’ve got had many householders write us with questions on what to do about poor contractor work. You’d be surprised how many of them have already been pressured into paying the contractor for the work they’re unhappy with. Upon getting paid the contractor it’s laborious to get the situation corrected. Fee signifies that the job is completed…if it is not performed to your satisfaction then it is not full!

• Always pay contractors with check or credit card. This paperwork your payment. Ask for a receipt.