Hiring a contractor....... what are the terms....

Making progress toward our new place,,,, ready now to actually start the construction phase....... finaly done with the earth moving.

Got my building permit last week for the barn. Looking to hire a contractor to pour a 42'x50' monelithic slab. Too much concrete for me to manage.

Is it unreasonable for me to state the following?

#1 I'll pay a 20% deposit when the job starts. (not before work starts)
#2 I'll pay the rest on completion... same day will write the check before they leave.

Trying to avoid the I pay deposit, they get busy and get to me 3 weeks later thing I see happening often. And have no interest in chasing contractors who got pain, but have not found time to get done.

Thoughts?

L.

I always pay when I am billed after completion. Have never put a deposit down with any contractor yet.

I had a slab poured last year, 40x60. I paid nothing until the job was complete. Cost was $5500. The contractor told me he paid the cement folks and the gravel pit monthly. I called the guy up, he set a date for the following week. 2 guys came out, with a big bobcat and a lazer leveling tool, set everything to the proper grade, set up the forms, the next day 3 guys showed up, the concrete soon after. The crete had to dry a few days because it was pretty cool weather here, then 2 guys came out, and did the sawing. Pretty happy.

Just about anything that you and your contractor agree to is reasonable.

Be certain the get the terms and conditions in writing before making any payments.

Dean

That's a relatively small concrete job. When I worked for a smaller concrete finisher (too many years ago) we had to pay the cement truck(s) when they showed up. I'm not sure how the boss handled the billing, but I could see where a smaller contractor might not be able to float the cost of materials and supplies.

This also varies by region of the country. Around here, "go ahead and get started, send me the bill" works OK. A town where I spend a lot of time in Colorado everybody wants paid up front.

Its not the big of job, pay 100% when complete. I would arrange to pay the concrete supplier direct. If the contractor doesn't pay him you're still on the hook for the material used on your project.

I will try for that,,, I'm hearing so many war stories about contractors starting jobs.... to make sure it is there's,,, then not returning cause they have -5-6 jobs started at the same time till weeks after the commitment. Once they start,,, and or have a deposit.... much harder to fire them and take another unless your willing to write off the deposit.

L.

Shoot man, that is reasonable. Here it would cost $15,600. They want $2.oo sq/ft to finish it after you form it and buy the concrete. I just yesterday poured 780 sq/ft at a temp of 105. Was under a roof tho. Concrete here is $110.00 a yard.

most contractors get a discount on cement that they stick in there pocket.Doubt if they let you pay the bill and see this.

If they need money up front, they're not a reputable company IMHO.

Make sure you specify the strength. I know a guy who was taken advantage of when the contractor specified a weak mix. A reason to buy it your self.

I would do the following and I did exactly described:

I had a garage form all set with block from concrete footing guy, who was done and paid in full. Then I called a flat work guy to float out 13 yards of crete, I told him that I would buy the concrete so that he only has to do the labor and I pay him when its done. I paid the concrete truck drivers with checks, and I paid the flatwork guy in cash $950 that was in 2000. He supplied 3 guys to all the work, it took all day for the 3 of them. The flatwork guy also supplied steel mesh in most of the garage.
I think it was $1100 for the crete and the $950 for the labor. 22 x 50 garage with a 10 x 10 breezeway too, 4.5 inches thick.
I think I got a decent price on material and labor.

I only hire contractors that I've used in the past and like. I will only do a cost plus labor deal. I pay the cost of materials and pay the contractor for his labor. My last few jobs, I didn't ask contractor for an estimate. I pay when work is completed. My contractors know if they put it to me, it will be their last job.

When you put down 1500 sq ft of concrete, every 1/4 inch costs about $100. It will pay you to get the ground level.

When you expect a contractor to include materials, you will be overcharged to cover any cost over runs.

If your contractor goes belly up, doesn't pay for the materials he used on your job, you will be forced to pay for them twice.

They are supposed to be bonded in order to take any money up front. Holding money back and/or not paying till the job is done gives them the INCENTIVE to finish the job.

It may sound harsh and may not apply to small contractors and jobs, but your money is the ONLY leverage you will ever have, besides a SIGNED contract. Contractor is doing the work, on good faith that they will be ultimately paid in full for all work in place, that is acceptable or accepted by said owner.

My only concern, unless I know their work, would be warranty, do they back up their work if defective.

On large jobs, payment is billed through a requisition process, and payment disbursed for acceptable work minus 10% retainage, each requistion. It's called percentage of completion method, nothing is provided up front, contractors must demonstrate financial stability. The retainage is held for 1 year or whatever the terms are, in case there are issues, ranging from minor end of job punch list items to more serious problems, owner still has contractors money and some leverage. Nothing is perfect, but that is basicially how it is done in most of the contracting word.

Now it may be apples and oranges, and the large scale projects means, methods, controls etc. may be overkill, but so many times I have seen small contracting jobs where both the owner and the contractor could benefit from applying what we do on big jobs, its just a lot smaller, but certainly helps weed out the "fly by night" types. Payment terms/ scope of work, building designs; plans, specifications, schedules, changes are typical in a standard subcontract agreement.

If were me, and I was hiring out, I'd find a reputable contractor, have them provide references to jobs they have done, go look at those, demonstrate financial stability and the willingness to commit to the job by signing a contract agreement to do what is called for in their scope of work. This is incentive to mobilize, start-finish the work, bill the owner and to get to the next job.

The contracting world still has a ripe element of technically challenged, sub-standard, experience lacking, not good standing with suppliers and financially constrained contractors, it probably always will, and is why a good construction manager is retained by any savvy owner of a large scale job. The last thing I ever want to see on a job is a problematic contractor who starts off by not showing up on time, meeting a schedule, unsafe, and is enthusiastic about doing the right work, completing the job, and billing the owner.

You can hire out work in many different ways, but buyer beware, it's wise to set things straight up front, I've seen it so many times where owners get strung along, taken for excess amounts, no shows that were paid up front, partial or in full.
If they do not have an account and are in good standing with their suppliers, I really do not want them on my job, this says a lot about the company. Now that does not mean if you work out a deal with a reputable company to pay for the materials when DELIVERED, and accepted, for an owners cost savings that they are necessarily bad, but most contracts read somewhere, to provide materials and labor, a good stable contractor should be able to deal with 30 day terms like any other business.

If you want peace of mind about concrete quality, I would recommend having test cylinders filled by an idependent test lab, worst case you take em your self, get the cylinders, fill them with the mix, 1/3 of a cylinder at a time, rod 25x,(pack with steel rod) fill another 1/3 of cylinder, rod 25x, repeat the for last 1/3, cylinder will now be full, screed off the top, take a total of 4 cylinders, they then can be broke @ 7, 14, 21, 28 days for compressive strength tests, or you could just hold them for reference, if there ever is a claim of defective material that independent test lab will support it and said contractor knowing this is being done would know it to be wise to not screw around.

I know it sounds like a lot of over thinking and overkill for small work and I would agree to an extent. Contractors do not like to see me on jobs, because someone is watching with a keen eye, but given the unknowns and the money being spent, I find that it's good for owners to be informed and have an ability to select a reputable contractor and effectively manage whom they hire, even if it is just a small ag or shop type building.

In my world.....Electrical contracting......it depends on the size/scope of the job. Often, we progress bill, usually weekly. If it is a new customer, I often get materials up front, or a portion of them. Something that is special order is paid on order also (like $50,000.00 worth of switchgear) the supplier will want a downpayment, so I do also.

A $5K or less job, we may float the whole job and bill on completion, that is only a few days anyhow.....but much more than that and I will not go on the hook!

Just as a contractor may not pay for materials and the owner then has to......a owner often will not pay the contractor for his work also!

What I see above is a contractor bash session.....there are two sides to the road my friends!!!

If the contractor agrees to perform the work, provide labor and material to an owner, then defaults on paying the supplier after owner has paid contractor in full, how is said owner liable for payment to supplier ? (contract between owner and contractor). Lawsuit, lien brought on by supplier ? I know state contracts may have guaranteed sub contractor payment clauses, sometimes including supplier's payment guarantee, if subcontractor defaults, but in the private sector, I've not seen that happen.

The other thing I don't like about an owner providing materials is the liability for quality of same, you bought/provided it, not the contractor.

Getting specified material delivered to a site, (say a proven 4000 psi mix, that the local d.o.t. specifies for example) is one thing, contractor still has to form, place and finish same, not withstanding any effects of the weather. Right now its hot summer weather, contractor screws up the finish due to weather, you provided the material, he's going to try to blame the owner for defective material. Contractor must have the ability to provide the materials, place the materials, finish the slab, in the given weather or at a time that weather is suitable and within his means to do so within given weather conditions, it kind of opens up can of worms when you provide materials, again might sound redundant and ridiculous, that is until a claim arises.

If providing materials to a contractor, be absolutely sure to order what complies with the design of the slab, specifications, plans etc. and take those test cylinders, make sure the ready mix supplier provides a receipt for specified design mix.

Ray, I poured concrete for years and I NEVER pulled crap like you suggest. In fact if the owner wanted to pay for the concrete, I always let him. Then when he didn't pay me all I was out was my labor. You would be surprised how much money I had to write off at the end of the year due to nonpayments. And a write off just means I don't have to pay taxes on money I never collected.

When I had my house built in 1968 I picked the style house I wanted in this developement. I also picked the lot and I made a few changes since I wanted a full basement and a two car garage. It came with a partial basement and a one car garage. All this info was put into the contract and we had to pay a $100.00 deposit. It came with 2 fireplaces, but we had one deleted. They deducted the price of the deleted fireplace which helped to pay for the extra garage. They got the balance of their money at settlement when the house was completed. Cost was $33000.00. I'm still living in the same house. The house next to me was resold back in 2006 for $359000.00. Hal

You need to ask around to see who is the best for what you want done.Then the contractor will tell you his terms and you can go from there. You should by now know some people in the area who would recomend a cement contractor. Another good place to go is the local redi-mix as they sure will know the best in the area. Being a stranger to the area thats where i would start sure doesent cost nothing to ask questions.

A contract is written evidence of what you and the individual/company doing the work agree to. So it can contain whatever you want and both agree to.
Some suggestions:
1) Do NOT pay out all the money till the job is done. Tough part is figgering out how much to hold back, some guys will keep coming back for 5-10% others will disappear when they have collected 75%. In framing my house I tried to hold back 25% but was soft-hearted and fell for a sob story and paid in full before it was done. Now we're in a lawsuit which is just costing more. Typically these type of guys don't own anything--it's all in the wife's name.
2) Always, Always have a signed contract. For the concrete work I had a signed contract and he more then lived to it; an absolutely honest person. The framer acted the same up front and I agreed to let it be without a signed contract, even though it was written. That then becomes an oral contract, but at least the terms are documented. I'm winning but it's costing lots more. Most contractors have a contract they like to use, go over it and insert/remove what you don't like; work for an agreement. If anyone refuses to sign get different contractor!

Crete is probably about the same here, if I buy it. The contractors who are buying a couple thousand, (or more) yards per year are going to get better matierals price than me. One example - I needed to get some gravel in my drive. I was paying $24/yd for crushed rock at a local pit. I had been adding a yard or 2 when I could get to it. I tired of that, as did my pickup. I called a neighbor who had a excavating biz. He came in with a backhoe, dug out a soft spot, filled it in with coarse rock, and then put down 30 yards of crushed rock. Then he packed it down with his bulldozer. For $700. (This was 20 years ago) Last year, I had him come out with his hoe and do some work. $55 per hour. Can't beat that with a stick. There are some jobs that doing it myself just isn't worthwhile. I am VERY efficient at writing checks!!!

I have been a carpender since I was in the 6th grade. I always colect my own wages, and as of today I have never signed a contract. I always do it per hr, and I have been blessed to never get a bad deal with the exception to one every twenty years.

No one asks the price per hr, or the cost of the project, they just tell me what they want, and check in a few times a week to answer questions.

There is no question about who wins with a contract, the contractor has to pad his pocket for unseen problems.

The contractors that are my friends always double the cost to cover their rear ends.

If you were to contract with me, and you wanted to watch me work, I could take advantage of you while you watched. A honest man does not need a contract. I am very fortunate to work in a small rural town where the bad guys are well known.......so I am always to busy to play their games.

On the other hand, I have done lots of work without any pay, because the folks are poor, and need a job done. It just seems like the right thing to do real often.

Billy,it is called a mechanics lien.Un paid supplier,worker,sub contactor can put a very expensive hold or stop to you taking possession of your project.Fairly common with builders in times like these and most times courts will rule against the you.

been a contractor for 31 years.never been bonded, almost always get money up front. count on one hand number of signed contracts. balance collected at finish.always stay busy.if your word is good so is mine.

This may not be what you want to hear, but the reputable contractors may not trust you. I would expect to pay a 50% down payment, then the balance on completion. You are also expecting a lot that they are NOT booked up 2-3 weeks out.

It is poor planning on your part, not to have gotten the bid and arranged for this before you did the dirt work. A good contractor will not let poor planning on your part become an emergency for them. They will walk away from the job, and you will be left with the crap contractors that are desperate.

I will not under any circumstances make any payments until the job is completed. If you give the contractor a big deposit, and he goes bankrupt before he starts, or before completion, your money is GONE with no recourse. If the contractor can't start without a deposit, he's probably not financially stable and is a risky choice. Another requirement you need to insist on is no materials may be brought on the job site without the supplier of the materials being fully paid. If the contractor doesn't pay the supplier, and you fully paid the contractor, you'll still be stuck paying the supplier or risk having a lein put on your property.
If they won't start without a deposit, move on...

If you only use contractors you have used in the past, how did you hire the first one?

Familiar with a mechanics lien etc. but was not aware that the contractor (private/home owner has contract agreement with hired contractor) could file one against an owner, if said owner was not the direct purchaser of materials used by the contractor.

Owner has an agreement with the contractor to perform the work and provide the materials, owner is then automatically liable, co signer, now the bonding company for the contractor if he defaults on supplier payment, even if paid by the owner in full for the job.

In that case contractor must provide a material and performance bond in case of default. I've taken over multi million dollar contracts, hired by bonding companies that had contractors default or were defaulted for cause.

What a wrangled, ensuing, and embroiled legal mess these matters turn into, as the next step for the owner would be to sue the contractor, file a claim, file a lawsuit for the amount of the lien, said contractor would most likely be bankrupt with no assets or liquidity at that time. After all the years around this business, working with suppliers, I'll have to ask, what goes on, lawyers/supply houses. In the large scale scenario where I've worked, contractors have to furnish bonds, indemnify/hold harmless owners, provide insurance etc.

Ive been doing concrete for almost 40 years now, started out with a old contractor in 72 ,been at it every since . Started contracting in 89, never ever signed a contract or took anything up front, have had an odd job that I didnt get finished to my specs , but the client always said the work looked good to them. In a situation like that I will reduce the price to what I think a fair price should be. I have never had a client refuse to pay ,( except one which I might post later), have never advertised for work, and always seem to keep busy ,have had some clients wait for up to 2 years for me to get freed up ,wouldnt hire anyone else, liked my work i guess.... Oh yeah like I have said before A HONEST MAN WILL NEVER BE RICH.....

There's too many fly-by-night contractors out there that will take your money and either take forever to do a crappy job or just up and leave with your money. I did landscaping and never wanted money up front but wanted prompt payment at the completion of the job. Even then some customers thought the price was negotiable or they could make payments.

I've had two concrete jobs done by contractors recently. One was a driveway at a rental property, and I wasn't too fussy about the job so I took a chance and went with a fly-by-night contractor. He wanted 50 percent cash up front, which he used to pay for materials and hire a subcontractor who took out the old driveway. I then paid him the remainder (in cash) on completion.

The second job was at my house and I hired a reputable contractor. I did all the preparation and forming myself, and the contractor poured and finished the pad. There was no money paid up front, and I paid for the materials, getting the contractor's discount. I paid the contractor by check before he left for the day.

Now both jobs turned out fine, but which one do you suppose was less stressful for me?

Try getting a performance bond out of a small contractor.

Its common practice for a supplier to go after the end user (project owner) for unpaid bills. That's why its important to deal with a reputabel contractor and why the lowest bid can cost you the most money.