Need help with a remodel and the contractor

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Topic Author
Skeeter1
Posts: 192
Joined: Sat Jul 06, 2019 1:50 pm

Need help with a remodel and the contractor

Post by Skeeter1 » Mon Mar 23, 2020 3:06 pm

Trying to make this brief, we hired a recommended decorator ( her husband has done work for us before, but we did not know her), for a remodel of a house in the Carolinas. She recommended a GC, which she claims she had worked with before ( but this was proved to be wrong). We liked the GC, but the decorator wanted to take the lead because she was local. Made sense to us.

We all met and she told the GC that she would give him most of the project, but farm out some of it like the kitchen cabinents, tile work etc. The GC grumbled a bit, but agreed to start the demo, gave us a price and did his part. He also pulled the permits under his name.

As time moved forward the decorator was a disaster and we fired her from that aspect of the job which made the GC and us happy. Since it was established that the GC might not do all of the remodeling projects, it turned out, as always, that we needed to make an unexpected expense.

The fireplace needed to be replaced completely. So we found a reliable fireplace company who could remove and reinstall the perfect fireplace. It made sense to us that the fireplace people should install it for safety and warranty purposes. Note: the GC had demoed that area and outside of the 2x4's, it was open.
When we notified the GC he has a fit, demanding 20% of the cost of materials and labor for the fireplace. I told him we did not realize that ( and/or that is BS) and we would get back to him asap.

Since then he has cut phone contact and walked off the job. This was a "good old boy" handshake contract so it is not about legal issues. What work he has done is excellent and we do not mind paying him what is fair, but also do not want to pay him a ransom.
This is a vacation home and we live in Florida.

So the question is, Should we pay him the 20% for work that others do , not him? What is usual protocol for GC"s percentages?
Yes we should have discussed this going forward directly with him, but it was not an obstacle before and did not cross our minds. We just want to do the right thing with him, without overpaying and yes we can hire another GC if we have to.
Thanks

chevca
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Re: Need help with a remodel and the contractor

Post by chevca » Mon Mar 23, 2020 3:35 pm

Since he has cut off contact, he may have made the choice for you.

Sounds like it's up to you. If you can reach him again and like his work, you may have to work out some sort of payment with him. Or, start looking for a new GC.

I wouldn't think there's all that much GC work out there right now. Maybe there is though? Seems strange to walk away from a good job right now. Maybe he's just throwing a fit and a little time will calm him down? Maybe not though...

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mhc
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Re: Need help with a remodel and the contractor

Post by mhc » Mon Mar 23, 2020 3:43 pm

OP, sounds like you might not have followed proper protocal for a GC in the Carolinas. If I was using a GC, I would have gone through him for all work, but I live in a different part of the country. I don't know what the expectations are in your part of the world.

HomeStretch
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Re: Need help with a remodel and the contractor

Post by HomeStretch » Mon Mar 23, 2020 3:48 pm

Is it possible that when you fired the designer who was supposed to be managing certain areas that the work now falls to the GC who expects to be compensated for the additional work? Using the fireplace as an example, is the fireplace company handling everything or are parts of it falling to the GC and his subs, such as framing, electrical, gas hookup, handling permits/inspections, giving fireplace installers access to house and making sure their schedule doesn’t conflict with any other sub’s work?

As an out-of-town homeowner, can you even effectively manage the areas the designer was supposed to handle?

In my area when you hire a a GC, the GC runs the project including pulling permits, scheduling inspections, managing the schedule and subs, ordering materials, paying subs/vendors, etc. and receives a % for his/her efforts. It is not common for homeowners to bypass the GC and to piecemeal some of the reno work to other contractors.

quantAndHold
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Re: Need help with a remodel and the contractor

Post by quantAndHold » Mon Mar 23, 2020 4:17 pm

The whole point of a GC is that they run the project, including taking care of unexpected things that come up. They have a stable of trades that they work with. Their compensation is a percentage of the cost of the project. So you've just made his life more complicated by hiring someone to work on his project without consulting him, and reduced his pay.

If you like the GC and want him to complete the project, your best bet is to apologize, tell him you won't do that again, and attempt to negotiate the fee down to 10%. It might also be time for a contract. He's licensed, right?
Yes, I’m really that pedantic.

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jabberwockOG
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Re: Need help with a remodel and the contractor

Post by jabberwockOG » Mon Mar 23, 2020 8:05 pm

Your GC might have negotiated a better "trade" price for the new fireplace and then he could have added a percentage for his management that likely would have cost you less than you getting a retail price and then asking him to manage that work as part of his project. You need to let your GC manage the project using his subs or else fire him and manage it yourself.

MarkerFM
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Re: Need help with a remodel and the contractor

Post by MarkerFM » Tue Mar 24, 2020 8:05 am

The expectation of a 20% charge for all costs for your job is pretty standard, although a bit high maybe for a large job.

We did a major kitchen renovation ($185K total cost) and had already sourced cabinets, stone and appliances. Pretty much all the materials for the job. The contractor charged 11% overhead. They charged a pretty hefty price for their own work. Turns out they didn't go a good job supervising them or any trades, so we won't hire them again or recommend them.

Now embarking on a master bath renovation that might total $40K. The contractor we will likely use has told us he charges 20% but said he would charge less for things like the tub that while expensive doesn't require that much work.

Topic Author
Skeeter1
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Re: Need help with a remodel and the contractor

Post by Skeeter1 » Tue Mar 24, 2020 8:06 am

All very good points and a well learned lesson. The original arrangement did not have him truly operating as a full time GC, but I guess the deal did change when we fired the decorator . It was short sighted on our part for not reviewing how we would work going forward if he is still willing.
Thanks for all of the "eye opening", valuable input on how to proceed in the future.
:beer

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Sandtrap
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Re: Need help with a remodel and the contractor

Post by Sandtrap » Tue Mar 24, 2020 8:17 am

There are so many unpleasant things that happen and can happen:

0 when no written competitive estimates are given or sought prior to a construction project
1 when folks use an unlicensed contractor (and do not verify one's that are)
2 when no written contract is signed between parties (any contractor, trades person, etc, for services and products)
3 when a "handyman" becomes a, sort of, "contractor"
4 when a carpenter/tradesman becomes a, sort of, "contractor"
5 when a "tradesman" becomes a, sort of , businessman
6 when the "lines and boundaries" of a "business" arrangement become blurred

Generally, if one hires a legitimate licensed contractor and signs a contract for the project, there will be details as to what the GC is responsible for: IE: flooring, plumbing, electrical, HVAC, etc. All monies are paid to the GC. And, the homeowner only deals with the GC (chain of command). If an architect is hired, then he is "the man" and deals with the GC and all below that. Often, there are conflicts when the homeowner hires other specialists on their own so that has to be coordinated. Outside of these parameters and things become messy.

It is normal for a GC to have a "fair" markup percentage on the fees of subcontracted work and materials that he is responsible for. This covers the gray areas of work, call backs, etc.

Trades licensing varies by State. In some States you can be a General Contractor with a pickup truck and a dog, while others one must come up through the trades union training programs and show years of experience as a foreman, job superintendent, etc (very strict and high standards). And, in some States, there are levels of GC licensing categories that dictate what size and scope of a project that that license is qualified for.

j :happy
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Topic Author
Skeeter1
Posts: 192
Joined: Sat Jul 06, 2019 1:50 pm

Re: Need help with a remodel and the contractor

Post by Skeeter1 » Wed Mar 25, 2020 10:27 am

Thanks Sandtrap and everyone. Yes we made a "rookie" mistake and the lesson is now being headed. I have a happy update to report. We spoke to the contractor and corrected the confusion. We are moving forward with the recommendations you all have given. The project is back on track and the GC is very happy.
We got lucky because this could have gone the other way.
Thankful for all the guidance of the BH community.

123
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Re: Need help with a remodel and the contractor

Post by 123 » Wed Mar 25, 2020 10:42 am

Skeeter1 wrote:
Mon Mar 23, 2020 3:06 pm
...The fireplace needed to be replaced completely. So we found a reliable fireplace company who could remove and reinstall the perfect fireplace. It made sense to us that the fireplace people should install it for safety and warranty purposes...
You were very wise to have a fireplace company replace the fireplace. They are much more familiar with the fireplaces they sell and service than contractors (or their hired assistants) who come across them occasionally and deal with a wide variety of brands. Our experience was that the fireplace store installers were much more attentive to exacting installation requirements. By having the store do the installation you also may avoid a lot of pointed fingers if a problem arises since the classic "out" for the store would have been that they didn't install it.

As to whether you should pay the 20% the contractor is asking for it may be worthwhile if you are comfortable with the contractor and his/her work. Remember it is just part of the total cost of your project, it's just mental accounting if you've got a hangup about tying it to a particular component.
The closest helping hand is at the end of your own arm.

HomeStretch
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Re: Need help with a remodel and the contractor

Post by HomeStretch » Wed Mar 25, 2020 11:09 am

In addition to the GC responsibilities mentioned already, a couple of items we put into our reno contract with the GC for our protection that you may want to consider are:
1. GC pulled permits and was responsible for resolving inspection issues and providing the CO to us.
2. GC provided copies of his and all subs’ license info and insurance coverage issued by insurance agency prior to anyone starting work. In hindsight I would have asked to be a named insured too.
3. Hold back of a % of the final payment until we had inspected work, punch list was done, we received CO issues by town and received signed releases from subs/major vendors.

As your vacation home is out of town, this is a good opportunity to cultivate a long-term relationship with the GC and subs if they are good as you are probably going to need something in the future even if it’s a house check for broken pipes, etc. periodically. Our GC was great and remains to this day a very good friend who has handy-manned small and large issues since the Renos. I still use the subs for all plumbing/electrical/other work. I am grateful they are responsive and fair priced. They in turn are grateful we kept them employed during the last recession.

Topic Author
Skeeter1
Posts: 192
Joined: Sat Jul 06, 2019 1:50 pm

Re: Need help with a remodel and the contractor

Post by Skeeter1 » Wed Mar 25, 2020 12:49 pm

123 wrote:
Wed Mar 25, 2020 10:42 am
Skeeter1 wrote:
Mon Mar 23, 2020 3:06 pm
...The fireplace needed to be replaced completely. So we found a reliable fireplace company who could remove and reinstall the perfect fireplace. It made sense to us that the fireplace people should install it for safety and warranty purposes...
You were very wise to have a fireplace company replace the fireplace. They are much more familiar with the fireplaces they sell and service than contractors (or their hired assistants) who come across them occasionally and deal with a wide variety of brands. Our experience was that the fireplace store installers were much more attentive to exacting installation requirements. By having the store do the installation you also may avoid a lot of pointed fingers if a problem arises since the classic "out" for the store would have been that they didn't install it.

As to whether you should pay the 20% the contractor is asking for it may be worthwhile if you are comfortable with the contractor and his/her work. Remember it is just part of the total cost of your project, it's just mental accounting if you've got a hangup about tying it to a particular component.
Thanks for the input. In fact when we asked if our GC could install it we found out that the manufacturer would not let anyone else other than them install it. We are giving the GC his full 20% and have instructed the fireplace people to coordinate everything directly with him. Everyone is happy.

Topic Author
Skeeter1
Posts: 192
Joined: Sat Jul 06, 2019 1:50 pm

Re: Need help with a remodel and the contractor

Post by Skeeter1 » Wed Mar 25, 2020 12:54 pm

HomeStretch wrote:
Wed Mar 25, 2020 11:09 am
In addition to the GC responsibilities mentioned already, a couple of items we put into our reno contract with the GC for our protection that you may want to consider are:
1. GC pulled permits and was responsible for resolving inspection issues and providing the CO to us.
2. GC provided copies of his and all subs’ license info and insurance coverage issued by insurance agency prior to anyone starting work. In hindsight I would have asked to be a named insured too.
3. Hold back of a % of the final payment until we had inspected work, punch list was done, we received CO issues by town and received signed releases from subs/major vendors.

As your vacation home is out of town, this is a good opportunity to cultivate a long-term relationship with the GC and subs if they are good as you are probably going to need something in the future even if it’s a house check for broken pipes, etc. periodically. Our GC was great and remains to this day a very good friend who has handy-manned small and large issues since the Renos. I still use the subs for all plumbing/electrical/other work. I am grateful they are responsive and fair priced. They in turn are grateful we kept them employed during the last recession.
+1000% on building a life long working relationship with him. We recognize him as fair and honest which is why we sought to correct our missteps with him.
Everyone is happy and he is getting his full 20% on everything. Again, we were not originally trying to cut him out of anything, we just did not know the rules of the game.
I hope that this helps others in the future.
All the best.

MarkerFM
Posts: 239
Joined: Fri Nov 30, 2018 4:18 pm

Re: Need help with a remodel and the contractor

Post by MarkerFM » Wed Mar 25, 2020 4:34 pm

Skeeter1 wrote:
Wed Mar 25, 2020 12:54 pm
HomeStretch wrote:
Wed Mar 25, 2020 11:09 am
In addition to the GC responsibilities mentioned already, a couple of items we put into our reno contract with the GC for our protection that you may want to consider are:
1. GC pulled permits and was responsible for resolving inspection issues and providing the CO to us.
2. GC provided copies of his and all subs’ license info and insurance coverage issued by insurance agency prior to anyone starting work. In hindsight I would have asked to be a named insured too.
3. Hold back of a % of the final payment until we had inspected work, punch list was done, we received CO issues by town and received signed releases from subs/major vendors.

As your vacation home is out of town, this is a good opportunity to cultivate a long-term relationship with the GC and subs if they are good as you are probably going to need something in the future even if it’s a house check for broken pipes, etc. periodically. Our GC was great and remains to this day a very good friend who has handy-manned small and large issues since the Renos. I still use the subs for all plumbing/electrical/other work. I am grateful they are responsive and fair priced. They in turn are grateful we kept them employed during the last recession.
+1000% on building a life long working relationship with him. We recognize him as fair and honest which is why we sought to correct our missteps with him.
Everyone is happy and he is getting his full 20% on everything. Again, we were not originally trying to cut him out of anything, we just did not know the rules of the game.
I hope that this helps others in the future.
All the best.
Not sure if your house is in a hurricane zone, but if it is then that is another reason to have a happy relationship with a great contractor. You will be closer to the top of his list if you suffer damage while new customers won't get their calls returned.

Topic Author
Skeeter1
Posts: 192
Joined: Sat Jul 06, 2019 1:50 pm

Re: Need help with a remodel and the contractor

Post by Skeeter1 » Wed Mar 25, 2020 4:53 pm

MarkerFM wrote:
Wed Mar 25, 2020 4:34 pm
Skeeter1 wrote:
Wed Mar 25, 2020 12:54 pm
HomeStretch wrote:
Wed Mar 25, 2020 11:09 am
In addition to the GC responsibilities mentioned already, a couple of items we put into our reno contract with the GC for our protection that you may want to consider are:
1. GC pulled permits and was responsible for resolving inspection issues and providing the CO to us.
2. GC provided copies of his and all subs’ license info and insurance coverage issued by insurance agency prior to anyone starting work. In hindsight I would have asked to be a named insured too.
3. Hold back of a % of the final payment until we had inspected work, punch list was done, we received CO issues by town and received signed releases from subs/major vendors.

As your vacation home is out of town, this is a good opportunity to cultivate a long-term relationship with the GC and subs if they are good as you are probably going to need something in the future even if it’s a house check for broken pipes, etc. periodically. Our GC was great and remains to this day a very good friend who has handy-manned small and large issues since the Renos. I still use the subs for all plumbing/electrical/other work. I am grateful they are responsive and fair priced. They in turn are grateful we kept them employed during the last recession.
+1000% on building a life long working relationship with him. We recognize him as fair and honest which is why we sought to correct our missteps with him.
Everyone is happy and he is getting his full 20% on everything. Again, we were not originally trying to cut him out of anything, we just did not know the rules of the game.
I hope that this helps others in the future.
All the best.
Not sure if your house is in a hurricane zone, but if it is then that is another reason to have a happy relationship with a great contractor. You will be closer to the top of his list if you suffer damage while new customers won't get their calls returned.
Agreed. Thanks.

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