So, a house is being built. There’s gonna be a payment due upon “structural completion”. A bow window is framed, but not insulated, sheathed, or waterproofed. (I’m using “bow window” loosely to describe an augmented concrete window structure on one of my client’s domes. Bow window is a close-enough analogy, I think, without getting caught up in the details of domes.) Builder says that be/c of impending winter weather, he won’t get to finishing off the bow until spring (involves spraying foam on the exterior, plus acrylic elastomerics for waterproofing). Without that work, that part of the house will leak all winter, making some of the interior work impossible to do till the other is done. Builder wants the payment for structural completion now be/c it covers a lot of work that IS done, while HO says, “but it ain’t complete.”
Have I explained that clearly?
I’m guessing the work left to reach the milestone is worth a grand or two.
What’s SOP for dealing with this?
(Personally, I think they should be able to get the work done and avoid the whole conflict. I’ve done a whole lot more in a whole lot worse conditions. But I’m not the contractor, so it’s not my call.)
Replies
u puttin' youself in the middle again?
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bobl Volo, non valeo
Nah. Client calls to give me a progress update and ask a question about waterproofing. Vents about other stuff. I specifically told him that I haven't seen the contract and didn't have a thought on who pays whom when. I get curious about how things work and ask here. Just trying to learn new stuff.
What's SOP for dealing with this?
who's? Mine or yours? I'm thinking mine don't matter much here ....
"structural complete" .... never heard that one ...
but ... as the contractor that wants my money .... is that window "structural"?
The place gonna fall down if I take it out ... didn't think so ...
read the contract ... as you're reaching for the checkbook.
I use ... "upon substantial completion" .... and I'd interpret missing a little detail like keeping the weather on the outside as not meeting my contracted wordind ... so if we used my contract ... I'd not be getting paid.
I'd be out doing what someone else should be ... you ... the GC ... the contractor ....
someone .... I'd be buying a tarp and building a tent and doing the work so I get paid.
U people never heard of tarps and/or temp flashing?
Builder says it is ... HO says it isn't ... sounds like a trip to the magistrates to me.
Jeff
Buck Construction
Artistry in Carpentry
Pgh, PA
>I'm thinking mine don't matter much here ....Mine either.>"structural complete" .... never heard that one ...Not a term I've used. I also thought that meant structural integrity, but HO thought it meant "the structure is completely constructed" as the only remaining step is "applying exterior coating." I dunno.I always worked through the winter, so I don't know why "impending winter" would be a problem. Told HO how I'd do the remaining task. Hopefully they'll get it done and not make this more contentious.But I'm still curious if milestones are always all-or-nothing, how they're defined (especially if a bit ambiguous), and what to do if hypothetically 98% of work is done, but a coupla items would have to be held off a few months for a legitimate reason. Anyone do something like, "I'll pay except for an $x holdback for the remaining item"?
We did this at General Motors, too.
I got my house reroofed. In the tear off process, one of the crew about fell through the roof. He caught himself on the 16 oc rafters. Kinda made a mess of the family room ceiling. When the roof was complete I paid the roofer all but 500 bucks. I told him when the ceiling was fixed he could come by and pick up his money.
The theory is the last $500 is heavy into the profit on the job. The guy can pay the materials and the subs. So he can stay in business. That is the incentive to get the odds and ends finished up.
Big Macs - 99 cents
Edited 11/24/2004 5:31 pm ET by FarmerDave
I generally word the cantract so the customer holds the final 10% until a final walk thru and sign off is completed.
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
But I'm still curious if milestones are always all-or-nothing,
Mine are never all or nothing ....
like I said ... "upon substantial completion" ....
and I get to decide what's "substantial completion" .... to me ... it loosely means ... pretty much everything except for the punch list items ... or stuff that'd just plain slow us down if we waited for them .. so let's keep on trucking ....
if I had a breakdown that included "substantial completion" of window and exterior door installation .... I'd not expect payment for a window that's not flashed ...
they're to keep the weather outside ... missing flashing doesn't keep the flashing outside .... so the window install ain't sunstantially complete.
Now ... if the grilles are backordered ... or I don't want to put the screens in just yet ... I say it's substantially complete and I want paid.
There are no hard and fast rules ...
I try to use common sense and common courtesy rules ...
Just like the magistrate I'd have to face if I tryed to scam someone out of the money too quickly.
That said ... I'd bet the contractor has a case with that particular contract wording.
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
Cloud,
>>But I'm still curious if milestones are always all-or-nothing,
In my current project the contract with my framer was 45% after all trusses were up. 45% on completion of framing. Final 10% after four way inspection was done. He was fine with that. Trusses were up last week except for about 17 feet of small trusses for a covered porch off the back of the house. He can't hang those until my concrete guy gets some piers put in late next week. I had no problem giving my framer his payment even though technically not all trusses were up. I knew he would finish the job and there was no reason to penalize him for delays from another sub. Now my concrete guy on the other hand....
For me it comes down to common sense and the relationship/trust you have with the other parties.
Regards,
Dennis
Edited 11/24/2004 9:04 pm ET by DJJ
I know this doesn't help your current predicament but I prefer to tie payments to commencement rather than completion. You can argue for a long time if the framing is done, but if the electrician has started payment is due, no questions asked.
Jon Blakemore
No certificate of occupancy , no money.
No way you could ask a homeowner to wait till spring . Thats absurd. Id fire the contractor for not completeing.
Tim Money
I live in a part of the country that can be pretty snotty and wet in the wintertime, yet there are always ways to get critical areas in the "dry," even if temporarily, to keep the project moving.
I just spent a week in Jackson, Wyoming and winter projects there, like in a lot of cold areas, are being cocooned to keep out the weather.
These efforts may cost a bit more in time and money for the builders or subs, but predictable weather (outside of tornadoes, hurricanes and such) shouldn't be an excuse to whimp out.
He should either complete the work for payment, or be responsible for damages.
Of course, a weak contract could give him an out.
We use progress billing spelled out in the contract generally 55%,30%,and 15%. Some projects we'll actually use monthly billing if they are large enough. I get enough retainage with public works projects so I don't believe in it with the private sector. I get really tired of the next slick willy trying to use our money to build their project.
Edited 11/24/2004 10:35 pm ET by pye
Edited 11/24/2004 10:36 pm ET by pye
I use the term "substantial completion" and explain to my customers that it means that the structure can be occupied and used for its intended purpose. It also means that the final required inspection has been passed and a certificate of completion and a certificate of occupancy has been issued by the building official.
There might be punch list issues after that point and a small retainage covers that. My customers, except for the lawyers, have always made the last payment on the books at substantial completion. Seems like the lawyers like to have a dollar amount held back until the last coat of paint has dried so they can formally approve the job. (Or nitpick it). I don't think that retainage has ever been a matter of trust - just the way lawyers do or have been taught to do things.