It's a good idea to sign a personal-services-contract with each of your sub contractors whether you use a construction lawyer, or a self made contract.
I have a friend who believes a "gentleman's agreement," with a handshake and a promise, is sufficient for anything she does. After all, that is what used to be the norm for our parents and grandparents. She recently gave literally thousands of dollars to a new acquaintance that she entrusted to deposit the money to an account for her. He didn't do what she asked and she didn't have anything in writing. Without a written agreement, she had nothing to hold this man to his promise.
Get it in Writing!
Once you sign a contract with a sub contractor, he/she is bound to the terms written within the contract, regardless of anything else promised that was agreed upon over the telephone or in person. In a court of law, the judge will say "did you have it in writing? Well shame on you!"
Your contract with each of your subs should state exactly
- What work they are going to do for you
- What they are going to charge
- How long they say it will take them to do the job
- Any additional details you want recorded
I heard one contractor tell me that they had signed a personal-services-contract that said they would be finished by “X” date or they would be charged $100/day for every day beyond “X” DATE. In this case, the cement contractor held them up for weeks and they had to pay nearly 60 days @ $100/day.
When I heard this, I thought that was ridiculous to charge such an outlandish amount, but after our experience with our excavator, I'm of a mind to say that “the laterals will be completed by “X” date or the Excavator will pay $100/day beyond that date”. That statement would insure that the Excavator would make sure those laterals were dug in a timely manner.
Read about our experience HERE
I've since heard of an outfit charging $2,500 a day if not completed by "X" date. $100 a day is not too much to charge.
It cost us literally thousands because the Excavator kept putting me off saying “Oh, we don't need to do them yet. I'll tell you when we'll do them.” He was counting on my inexperience to let him dictate the terms and I let him get away with it, to my ultimate expense.
As it turned out, he got sick and the project drug out into the cold of winter, and we had a 14 inch frost depth when he had to dig. Our water line was exposed to the cold and froze, so there was even more costs to add to our expense while he (excavator) covered the trench with a tarp and heated the pipes. And then when he wanted his money, it was my fault he hadn't gotten paid yet.
You can read the "rest of the story" HERE.
A simple personal-services-contract would have settled that, but
as I tell in my excavator section,
he was as “slippery as an eel” and escaped having to sign a contract with me.
Cover your bases in case your subcontractor doesn't do what he said he would do, or tries to charge you more than was originally quoted by signing a personal-services-contract signed by both you and the subcontractor you have selected to do the actual work.
The personal-services-contract should include exactly what is included as mentioned above.
Protect yourself in the event that your sub will want to increase his charges after the work is done.
A lawyer suggested to one of my contractor sons, that he needed to get a copy of the subs' contractor's license. That would be proof that he was licensed and could be used in a legal dispute over anything to do with his profession.
Our daughter and her husband had several experiences I'll eventually have them added to my website in relation to getting the subcontractor's license. You'll have to check back regularly as I am adding site content periodically.
Suffice it to say that if you sign a personal-services-contract with your subs you won't be as likely to get ripped off.
Our inspector did warn us to be careful and not pay the framing sub we had, until he was finished with his work.
It is quite a usual thing for framers and other subs to do only a 'half baked' job and ask to get paid. I mention framer because, that is one of the most critical jobs you want finished. It's when you would have to try and salvage "a bunch of sticks" to finish the house if the framer up and quit. When our framer asked to get paid "all but $1000..." and he was far from finished, people told me he planned on "walking" with the money and not finishing the job. Thank goodness for friends giving their opinion.
A few subs will tell you they "have to pay their help" and so they need to get paid. Since you are a newbie to this world, they expect you to be "soft" and pay them, out of empathy for their "plight". Once they have their money, they will sometimes “walk”, and never come back to finish your job.
As long as you hold the money, a sub-contractor can't leave if he wants to get paid. Make sure your contract is specific as to how much they must do before they get paid.
As you hold the purse strings, you can insist on them correcting, or finishing whatever they are overlooking or doing wrong.
In our case, RL took a day off work to sit at the job site telling them "If you want to get paid then finish this or that, put up the inside walls,put in a window in the garage like the plan says...." etc. They did it, but he shouldn't have had to take off work to make them do it. That was the framer contractor's job. We should have deducted a days' wages for RL from the agreed upon personal-services-contract with the framer. We just needed the job done so we could move on.
Above all SIGN A personal-services-contract with each sub and
have them fax it to you before they begin
Get to know your city inspector and even offer to pay him to come look at the home during framing. This will satisfy you that the framers are doing things right and will give you an idea of the things you need to watch out for.
MOREBuilding your own house as owner/contractor
Selecting your House Plan
Architect to draw up your Floorplan
Getting a loan
A Step by step guide to building your free home
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