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alkizmo

join:2007-06-25
Pierrefonds, QC
kudos:1
reply to Draiman

Re: Garage addition

said by Draiman:

The other cool thing about this contractor is they do 'progressive' payments. They do the designed then I sign off on them and pay them 5% of the job cost. They obtain the permits and I sign off and pay them another 5%. They do the foundation and we sign off and pay 15%. We sign off on all work before we paid for it on each step. I think there like 14 sign off and payment points in the payment schedule.

Don't forget to withhold 10%-15% for X days after the end of construction.

I don't know how things work in the states, but here, a sub-contractor or material supplier can put a "legal mortgage" (Don't know the equivalent term in english) which supersedes any other mortgage, if they don't get paid, even if the main contractor is the one who didn't pay, your property becomes the sub-contractor's collateral.

After 35 days (In Quebec) of the end of construction, the deadline is reached and you're in the clear. Then you pay your contractor the last 15%.

But that's just a suggestion.


SwedishRider
Rider on the Storm
Premium
join:2006-01-11
not Sweden
kudos:1
said by alkizmo:

I don't know how things work in the states, but here, a sub-contractor or material supplier can put a "legal mortgage" (Don't know the equivalent term in english) which supersedes any other mortgage, if they don't get paid, even if the main contractor is the one who didn't pay, your property becomes the sub-contractor's collateral.

In the U.S. it's called a mechanic's lien.

»en.wikipedia.org/wiki/Mechanic's_lien


nunya
LXI 483
Premium,MVM
join:2000-12-23
O Fallon, MO
kudos:12
Reviews:
·Charter
·voip.ms
reply to alkizmo
Not gonna happen. Nobody (contractor) in their right mind is going to sit and wait for their lien rights to expire before the customer makes the final payment.
Your advice is unrealistic.
I wait until the last minute to file liens (liens are a "last resort"). If someone was holding out on me just to try and ride the lien period, I would file the lien immediately and then make them pay the filing and processing fees to remove it. Theft of services is a big problem these days. There may be a lot of bad contractors, but there are even more bad customers. It's a double edged sword.

All you have to do is ask your contractor for a lien waiver from himself and anyone who worked on the job. Obviously good lien waivers are nullified by cancelled checks or cancelled credit card payments.
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...because I care.


alkizmo

join:2007-06-25
Pierrefonds, QC
kudos:1
said by nunya:

Not gonna happen. Nobody (contractor) in their right mind is going to sit and wait for their lien rights to expire before the customer makes the final payment.

Standard procedure by banks who finance major renovations like this and base their loan/value ratio on the potential value of the property after the project is complete.


Gord

@teksavvy.com
Just remember this is taking place in the US where the Banks don't follow any rules.

Here in Canada they never lend money to people based on what they say they earn hoping it was actually true.

Nice garage by the way. I only wish in the future I can get a lot with enough space to build something similar.


AVD
Respice, Adspice, Prospice
Premium
join:2003-02-06
Onion, NJ
kudos:1
reply to alkizmo
said by [bquote= nunya See Profile :

Not gonna happen. Nobody (contractor) in their right mind is going to sit and wait for their lien rights to expire before the customer makes the final payment.

I think most residential contractors expect payment after final inspection, retainage is quite common in commercial construction, but usually for leverage in warranty issues.
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--Standard disclaimers apply.--
The preceding posting is null and void in Arizona and any other jurisdiction where prohibited by law.