Are we being reasonable with contractor?

[Anonymous]

Had major flood damage to our home. It's about a $60,000 repair and is covered by insurance. Since we had the contractors coming in, we decided to do some work, about $25000 worth, that we had been saving for for a few years.

The contractor didn't have any payment schedule in the paperwork we signed. The insurance work and extra work are about 95% complete. However, as has been our experience, they got about 90% of the work done in the first two months, and have been really dragging their feet on the last few details. In the beginning, they'd have crews out here all day, 6 days a week. Now, it might be two weeks before someone comes out, and only after we prod.

Anyhow, the insurance/mortgage company have released 2/3 of the payment and will not release the final third until we sign off that it is 100% complete and an inspection is done. We have paid $20,000 of the $25,000 we owe.

The contractor has been really pestering me to complete the payment on our portion. I keep telling him we will pay the final portion when the job is 100% done. He's saying he's out $25,000 for about $500 worth of work. My point is that we have paid 80% of our portion, we have no control over the mortgage companies policies, and if he'd just get the darn work done, he'd get the money.

[Anonymous]

Honestly, I probably would have paid him out of pocket and then dealt with the insurance company on my own. That's what I did with my contractor after a derecho did about $14K worth of damage and I paid for another $5K of work that made sense to do. I paid him most of what I owed him, paid the rest after the work was done and then reimbursed myself with the insurance check. It's not really fair to withhold that much money when so little work remains to be done. (but yes, hold back a big enough portion that he has incentive to finish the job.)

[Anonymous]

We can't do anything about the insurance portion. Our insurance company will only issue the check to our mortgage company and the mortgage company won't release it without an inspection. My worry about just paying him the rest of our portion is that he is already taking months to get the last few details done. If he finishes the insurance work first, he will get the last $20,000, and if we've paid, he's basically got no incentive to do the last half dozen things on our punch list.

[Anonymous]

Op, I think you are being very reasonable. The contractor should not get the final payment until all work is done. I'm an interior designer and this is normally how things are handled.

[Anonymous]

I don't know, I think it's excessive to withhold $25K of money for a very small amount of remaining work. He may be lagging on finishing because he thinks you're screwing him over and he needs to have money coming in to pay his workers and pay for materials purchased. (i.e. he's doing work for other people who are actually paying him.)

[Anonymous]

don't give him any more money. This is a standard contractor's play. Once you have handed him the money, he's gone and you will have to sue for completion and the judge will tell you you were stupid to make the final payment without the final walkthrough and punch list. Your only leverage to get him to finish is the money. He's off on "new starts" he wants to finish before snows come. So to get his attention, just refuse to pay. He hasn't held up his end of the contract.

[Anonymous]

Nope, don't pay him. Work will never get done. don't budge.

[Anonymous]

I would withhold 20% and pay that last amount after the job is done. What was the payment and draw agreement when you signed with the contractor?

[Anonymous]

We never signed a separate payment and draw agreement. He agreed to the mortgage company's contract (1/3 up from, 1/3 midpoint, 1/3 on completion) before starting. He's gotton the first two payments from them.

We are just withholding $5000 from our $25,000 job.

It's also nuts how little work this is. He has to seal some tile, repaint one small wall, install a vent, do one tile threshold, fix a drain and an icemaker, and replace area rugs, furniture, and get a cleaning crew in.

[Anonymous]

I'd ask him to come estimate the cost of the rest of the work to be done so you can go over every item and show how little it is. If it's so little, he can knock it out and get his money. If he chooses not to, you can see if your insurance has anyone who comes out in these situations to assess what the insurance will pay him to end the contract and then you can hire another.

[Anonymous]

No, don't pay or he will never complete the work. Tell him you will make sure he gets paid as soon as the work is done. I would clean myself at that point and put down as many of the rugs and other stuff you can do yourself. Then take that off the bill.

[Anonymous]

Anonymous wrote:No, don't pay or he will never complete the work. Tell him you will make sure he gets paid as soon as the work is done. I would clean myself at that point and put down as many of the rugs and other stuff you can do yourself. Then take that off the bill.

Trust me, I'd love to, but the bill wasn't itemized to that extent. The cleaning is because of a load of concrete dust that is now covering the things stored in our unfinished basement. The area was totally flooded, so we removed and cleaned everything so we could submit damages to insurance. Then, right after we replace everything, they drill a hole in the concreate and blast everything with dust. We requested they cover the shelves with plastic beforehand, but the message didn't get to the actual workers. So they agreed to clean. The only reason I don't want to move the rugs and furniture myself is that the new flooring is guarenteed by our insurance company for the work that the contractors do. So they have an incentive not to scratch the new floors when they move all the area rugs and furniture back in.

[Anonymous]

Oh, and I did suggest that we hire our own appliance guy to come in and fix the drain and icemaker and just deduct it from the total, but they declined.

[Anonymous]

I think you are being totally reasonable and if they are not doing the work now when they want the money there is no way they will do it once they've been paid.

What a crappy contractor. Please do us all a favor and go on checkbook/angie's list/etc after this is all done and review them.

[Anonymous]

Agree with PPs. Don't pay until the work is done, and out the contractor here while you're at it.