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martin3

Contractor Payment Schedule

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We're about to get started with our project (new garage, driveway, siding, windows, roof). Plan is to do garage & drive first, then the rest. Payment schedule proposed by our general contractor is 22% on signing, 33% when windows are ordered, 34% when siding is ordered, and 11% on completion.

Does this sound reasonable?

What is a typical payment schedule for this size project?

Our first instinct was that we'd rather hold a little more back for the final payment.

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I say 1/2 when they start unloading at the most. I will pay for all material when unloaded...if I know the person 100 a day per person (at the end of the day) then the rest when finished.

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What is the reputation of the GC? If you've done your homework - checked references, TRCC history, etc... and your GC looks good, the you're probably OK. If you haven't and your GC is dishonest, it won't matter how much you hold back, you can still get screwed. One of the best forms of protection is to request lien releases from material suppliers. After all, if the GC doesn't pay for the material, the suppliers will come after you.

On the other hand, it is not uncommon for the GC to get screwed by the homeowner. Most good GC's will structure their draw similar to the one you were given, in order to lower their risk. It's OK for them to do this, their reputation allows it.

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How much is the total project cost?

You didn't ask, but I wouldn't do the driveway till the end.

flipper

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It doesn't seem entirely unreasonable to me. GC's are always trying to manage their cash flow and will want to get paid as soon as they have to pay a supplier or sub.

I agree with Flipper, too. Save the driveway for last and don't risk it getting damaged by the other activity. You're probably getting a better deal from the concrete guy for pouring the garage slab and driveway all at once, but the extra cost of the second trip is probably worth having a pristine and clean driveway in the end.

Edited by cottonmather0

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Get a schedule of values from your GC.

I would wait, for example, until the roof is complete and pay for that portion of the schedule of values and retain 10% of the value. Keep repeating that action until the project is complete. When the GC says the job is done, get with him and his key subcontractors, walk the project and make a WRITTEN punch list with all objectionable items and / or items needing correction.

Have the GC give the punch list to each subcontractor and set a date to get the items on the punch list rectified. When the punch list items are completed to your satisfaction, pay the GC the 10% retainage. As another poster said, make sure to get lien waivers from all major material suppliers and subcontractors (subcontractors with major material purchases should provide lien waivers from their suppliers, as well).

Good luck.

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