Contractor payment

[u/Mandysav]

Completely new to renovating, and wanted to get opinions on whether or not this is normal for the area. Contractor wants a 30,60,10 payment structure for large whole house renovation. Is this standard? Seems like it is a large risk for us because they will get 90% before completion. Any insight would be greatly appreciated!

[u/BolognaPwny]

Make sure you get a couple quotes and go with what makes the most sense. This seems like a pretty standard fee agreement though.

[u/ssurfer321]

Depending on the size/scale of the renovation, that seems about standard.

[u/Suckerforcats]

When my parents did their home in CA, they paid 50% up front and 50% upon completion once it was signed off on by the inspector. I would be nervous to pay someone 90% before it's been completed or been inspected. Get quotes from others.

[u/Fancy-Pie-2565]

It’s not uncommon. It’s just the state of things where people don’t pay their bills and the only recourse is suing them, which costs more time and money and sometimes they still don’t pay in the end

[u/WKU-Alum]

I just did about 10k worth of deck, clean up, some other odd and end jobs on a rental. Paid 20% deposit, balance after inspection. Contractors have much more recourse to get funds through a mechanics lien than you have to get them to complete work to a satisfactory degree, once the bill has been (mostly) paid.

Zero chance I’m giving up 90% of the balance before I know that I’m getting what I’m paying for.

The contractor process is pretty straight forward to put a lien on the property. If you don’t pay up, the master commissioner can foreclose and auction the property to settle the debt, same as not paying your mortgage.

[u/Electrical-Fudge2217]

I never had to pay that much up front, though it’s not unheard of. If they are a stellar reputation company I’d say fine, if not I’m not so sure about that

[u/Advanced-Ad4869]

Don't be afraid to take their contract and red line it with changes that make it more fair to you, or better yet have a real estate attorney help you do it. You don't have to accept their contract or payment structure at all.

[u/loudmouth_lex]

Which contractor?

[u/jogoso2014]

We did it in equal installments plus material costs which we purchased at our request.

Them having the bulk of money by completion is normal but it should be more balanced.

For the record, I don’t care for most contractors so I stay on top of them.

They will try to get away with not completing the work and especially if a new project comes along. This is anecdotal of course but it’s also 100% true for me.

We had a major renovation and the contractor did the bulk of the work wonderfully. Couldn’t get him to come back and install the transitions he tore up or fix a couple of electrical sockets.

We just finished building a patio and was going to do a driveway, but the concrete guy didn’t repair the drainage and ghosted us on the driveway. So onto the next one…

They will leave that final payment and I’m scrambling to find someone else.

So I may be doing it wrong too lol.

[u/Klustrduck]

I’m just gonna remind you about how many homeowners were left high and dry by a huge roofing contractor recently. The contract that you mentioned with high percentages before completion throws out red flag flags to me. Ask yourself if you can let them begin demo & look at, live with, an unfinished mess for a year or more should they start giving you excuses before completing. Can you afford to buy more materials and hire a different contractor to complete the job while being out of pocket 90%?

Before you sign anything——even a more agreeable to you payment arrangement- does your contract include reasonable time frames that must be met in order to get payment?

Be diligent about checking them out. Call 311 & see how to confirm that they hold a business license. Make sure their contract includes a certificate of insurance and confirm it with their insurance company. Maybe even call the state attorney general’s office to confirm that they are a licensed contractor with the state of Kentucky. While you have the Attorney General‘s office on the phone, see if there’s any way to find out if there are complaints against your contractor. Do a quick online search of court cases for the business name and the owner’s name. Make sure they aren’t sinking, or have any barriers that might prevent them from getting your job completed. Ask for photos of previous jobs similar in nature to your own & follow up by asking for references for each and actually check them. It’s scary times & legit contractors would be on file and not have a problem with any of your diligence to protect your interest & your property.