Money
Money is the root of many of the potential conflicts on the job and one of the primary reasons for putting everything in writing and getting specific quotes and contracts prior to the start of construction. Don’t go into a process based on ‘guesstimates’ without establishing limits. If a plumber cannot quote a job, for example, without tearing a wall out, discuss the potential upside expense and if it is out of your budget, seek alternatives. Ask for areas where he can limit how far he goes if necessary to save money. One example might involve eliminating a second sink in a island to avoid tearing floors up to run drains.
Other money problems include:
• Workers who underestimated the job. If you a have a signed contract this should be the worker’s problem. The reality is that it is your problem as well because it may mean they are surreptitiously looking for ways to cut corners to get back to even. If it is obvious that they underbid the job or it is more involved than originally thought, it may be to your ultimate benefit to re-negotiate the price to cover their mistake. We realize this may seem unfair but it can make a huge difference in the quality of the work and the likelihood that it will get done on time.
• Cash Flow Problems. Cash flow during a job is necessary to keep things moving forward. On your side it means having your financial resources in place before signing any contracts. Otherwise your project will come to a screeching halt as the subs get the word that there are money problems. Put the money aside and pay promptly.
On the contractors’ side, poor planning may mean that they run out of cash to pay wages and or materials costs, resulting in another slow down or stop to work. If your contractor seems to be having financial problems you can either go elsewhere (possibly losing your deposit) or hammer out an agreement that lets you pay suppliers or issue checks on an as-needed basis. Don’t dole out chunks of cash for unspecified needs and consider getting some kind of agreement drawn up by your attorney if the amounts involved are significant.
• Disagreements about completion of work. Your contract should clearly delineate what constitutes the completion of any stage of construction where a payment is due. If things change as the project progresses you and the contractor involved should sit down and write out an agreement as to what means what. These deadlines serve to advance progress and keep projects on track. Don’t continually change the rules; if the contractor has made a good faith effort to get the job to the next stage you may want to pay to avoid the cash flow problems mentioned previously.
