Is Insulation Required?
I am in the middle of a 50K renovation. My GC and I are in disagreement over insulation. We knocked down the walls in the house and completely reframed the interior. The house is very old and the plaster walls did not have any insulation. My friend that is an inspector said the house would HAVE to be insulated.
My agreement with my GC was to completely renovate the house top to bottom so that the house was fully ready to have someone move into. This is a relatively expensive house - will sell for at least $230,000. Not bad for a 1200 sq ft house. Inside will be fantastic...granite, new hardwoods, stainless,etc.
He is saying that the house does not have to have insulation, therefore my request to put it in should not be included in the original figure of $46,000. He wants me to pay an additional $800 for the insulation and the installation of it. My contingent is that the house would have to have insulation so it should be included. He is also doing the same thing with the termite treatment that the house had to have...that it should not be deducted from the original $46K. The treatment costs $600.
Should I just eat the extra $1400??
Thanks in advance.
Suntzu18
Get ready to eat a whole lot more if you have a ridiculous contract that just says
"I will fix da house for $46,000"
Line items, line items, line items...
repeat after me, you need line item detail on a rehab contract. You need to know exactly what you will be getting for $46,000.
It is called the scope of work and should be very large and detailed in order to protect both you and the contractor.
Post your contract here and then we can see what you should expect.
Thanks for the replies. We did not line item the contract out and definitely should have. Overall there have not been many surprises, only that the GC works when he wants to. We found out he has about 10 other projects going on, which we were not happy about. We are paying a 14.5% interest only payment of $2200 a month so to us, time is of the essence. We did not have the completion date in writing ( I know, I know) and he is now not willing to put it in writing with a per day penalty. We are about 30 days past the verbally given completion date.
The $1400 does not really affect us Our hard money payoff is around $175,000, we should be able to realistically get close to $230K for it. Its in a great area. We are agitated at the guy taking his sweet time and telling us he is his own boss and works when he wants to not when I want him to. Based on that we dont want to give him any extra. We will however, chalk it up to experience and learn from it.
Can you generally put a completion date in the agreement with a per day penalty if it is not completed on time?
Rehabinator, is there any way I can look at one of the contracts you have used in the past? I would love to see what it should look like.
Thanks again.
Suntzu18
Don't feel too badly about not getting a line item from your contractor. It's ALMOST impossible to get one here in atlanta to GIVE you a line item contract. Sounds like you've got a stereotypical GC, works when he wants, does JUST good enough work to get by, and doesn't care that it's killing you in the meantime. Oh, and the having 10 other jobs going on? Is he doing the "I'll shift some guys around today, move some materials around tomorrow" thing yet?
Guys like that are the reason I've started doing the contracting work myself, or actually DOING the work myself.
Well, you are in a really crappy situation and I hope you can get out of it in one piece with your sanity intact.
Line item was misleading. Don't get caught up in that. What I should have said was a detailed scope of work. Line item refers more towards pricing out each detail, where as scope of work refers towards detailing the work itself.
There are no hard and fast rules to scope of work, if you ask the contractor as you are finalizing your agreement "This includes you tiling the bathroom floor with 12x12 tiles right?" and he says yes, then you simply respond "Please put that in writing in the scope of work." Simple as that. The more detail the better. I would want to see a tile allowance say of $3.00 a square foot for the tiles themselves.
As far as a contract, each contractor is going to bring his to the table that you work with. However, adding scope of work details is as easy as adding a line in the contract that says "refer to scope of work" then adding a seperate sheet of paper detailing what will and won't be done.
Suntzu,
Are you talking about exterior walls or interior walls in regards to the insulation.
If its is an interior wall then I side with the GC, if it is exterior then I agree with Rehab, it should have been put down in writing, however depending on state code, if GA has one....then you may want to look at that to help resolve the issue.
The wording of completely renovating the house is vague to say the least.
The termite treatment............if there is an termite issue then yes.....however if you are doing preventative maintenance then again I side with the GC since you failed to give details as to what you wanted.
A good GC will go over such things however most rehabbers are looking at the cheapest GC, not necessarily the one with the most expericence and knowledge......which is what you are paying for ultimately.
You should also sit down with the GC and discuss your concerns about how the job is progressing as ask how he is going take care of those concerns.
If he blows you off then fire him and find a new contactor.
If he is willing work it out then ask for a "flow schedule", this is nothing more then a scheduling chart showing when the various trades are schedule to do their work.
If your GC or any GC does not know what a flow schedule is................then this is what I call a CLUE.
Find one that does.
Rehab,
You may want to look at writting an article what constitutes a good rehab contract.
GC's can do some stupid things however rehabbers that fail to understand the scope of their own project does not absolve them from their own ignorance yet alone additional cost associated with such.
(I am not being mean, just frank.........my yankee side is obviously showing)
NC_Yank
Ok, here's the deal:
If those are indeed exterior walls without insulation, and they were unopened at the time of bidding, there's a good chance that neither you, your bidders, nor Santa Clause himself knew the insulation was missing. If this is the case then you should realize your contractor considers these "unforseen conditions." Those are grounds for a change order.
If you want to try to conceive of some type of "all inclusive" contract in the future so your contractors become responsible for all surprises, just realize that you are going to pay dearly for that in high bids. The standard way of paying for unforseen conditions thru a change order is the cheapest way.
As for the time-of-completion issue, you definitely screwed the pooch by leaving out a final completion date and a liquidated damages clause.
I'm betting my chocolate santa that you also payed in advance, which has sorely diliuted your bargaining power. Don't worry, most consumers make this same mistake! If so, you, like they, end up at the mercy of your contractor.
And it is the absolute upside-down way to deal with contractors.
Let me tell you how you might get out of this now. If you've paid him in advance then your contractor has gotten ahead of you. That is to say, he owes you, instead of you owing him. You have paid him more than he's invested in labor and materials. That is too bad, and yes, all too common. Now the contractor reigns supreme and the poor homeowner is the miserable worm.
If this is indeed the case then your goal now is to somehow get yourself ahead of him again. Be patient, watchful, friendly and coax him into spending some bucks. You can promise him a payment but hold off until you get a truckload of expensive materials delivered. Watch for a nice big crew of expensive workers on the site. If you see a roof going on, for instance, you can bet your contractor will be at your door for a check.
NOW is the time for that sit-down chat. ONLY when you are ahead of your contractor in the payments will you get his most rapt and courteous attention.
Also, take notes at this meeting. Let him see you writing things down. The written word has power. Get all your agreements pounded out and written.
Of course, you may be too far gone at this point to get ahead. I don't know. But getting ahead of your contractor (and staying there) is your best chance for timely, excellent work. It's how the pros manage construction. Everything else is just hot air yammering, voiced complaints, letters here and there, yadda yadda.
Contractors are very good at taking the reigns of power from homeowners. It's a shame and it needn't be that way. Check my profile if you want more info.
All I can say is I'm glad I don't have to spend my days worrying and trying to get one up on everybody else, especially those helping me make money by working for me. There is another way which is to create win/win contracts, the only thing it takes is to have an attitude where you respect the other party as much as you would like to be respected yourself and work out details in advance so nobody gets ahead of each other at any point and everybody is happy and makes money.
JC,
Your bias is coming thru, Again.
I know this is because you want to peddle your book about contractors.........but lets be realistic.
As Rehab stated, a homeowner and a contractor can have a win / win contract ..........and they should.
Yes you have seedy contractors but there are just as
many seedy people that are out to screw contractors over. They nickle and dime you death over things that are not in the contract. They put off paying you or refuse to pay you and use all sorts of silly excuses in order to justify their immoral actions.
There are so many red flags that are often ignored by the homeowner..........usually because of dollar signs being involved.
You do a diservice in teaching that there is a power struggle in which the homeowner should have the upper hand.
Any legal expert will advise you that a good contract is there to protect BOTH parties..............its not about who has the upper hand.
Its easier to put fear into peoples heart and then capitalize off their fear by teaching them to how to overcome this fear......obviously for a price.
This is what you do........in my not so humble opinion.
I have asked this before but you never have answered,
but are you a licensed contractor yourself in North Carolina...............I have seen your site but dont see you listed as licensed contractor with the board........?????
Have you ever ran a contracting business........and made a profit?
Just curious...........Im trying to figure out why you hate contractors so much.........or at least portray yourself as an expert in the field of dealing with contractors and knowing how they think.
NC_Yank
Here is a copy of our original agreement below. We have another concer which is alos the roof. Do we have the right to send a roof expert or roof inspector back in to verify that the agreed upon has been done? We have a good feeling that a very cheap, quick fix has been done. What do you guys think?
Here is the contract:
1) Foundation:
a) Remove all rotten and termite infested floor joist, bands, studs, top plates and support beams.
b) Replace with new lumber to meet code. (Pressure treated where necessary).
c) Pour piers to support floor systems and load bearing walls.
d) Sure up exterior brick wall near driveway.
Total: (Including materials and labor) $3,900
2) Floor System:
a) Install new floor joist in master bedroom, master bath and kitchen with 2x8 lumber.
b) Install subfloor system in master bedroom, master bath and kitchen.
c) Install hardwoods floors in Kitchen, dining room bathrooms and living room.
d) Install Berber carpet in all bedrooms
Total (Including materials and labor) $5,500
3) Roof:
a) Remove existing roof shingles.
b) Repair rotten slats
c) Add necessary supports for roof system
d) Build cricket in dead valley in rear.
e) Shingle roof with 3 tab shingles.
Total (Including materials and labor) $4,200
4) Electrical:
a) Install new light fixtures in all rooms.
b) Ceiling fans in Master bedroom and Living room
Total (Including fixtures and labor) $1,200
5) Doors & Windows:
a) Install new interior doors
b) Install new exterior doors
c) Install new door knobs
d) Install new windows
Total (Including materials and labor) $4,500
6) Sheetrock:
a) Remove all existing sheetrock from walls and ceilings
b) Replace with new ½ inch sheetrock.
c) Replace base molding with new
d) Tape, mud and sand to paintable finish.
e) Paint interior of house. (Walls..2 different colors….ceilings white)
Total (Including materials and labor) $6,200
7) Kitchen:
a) Install kitchen cabinets. (Using Brian’s cabinet person @ $1,950)
b) Install new countertop.
c) Install new sink
d) Install new oven/cook top combo
Total (Including materials and labor) $2,800
8) Bathrooms:
a) Install new tub/shower combo in bathrooms.
b) Install new toilets
c) Install new vanities and mirrors.
d) Install new fixtures, including faucets, TP holders and towel bars.
Total (Including materials and labor) $5,000
9) HVAC
a) Install new HVAC unit for house.
Total (Including materials and labor) $3,500
10) Siding:
a) Replace existing siding with new vinyl siding.
b) Cap soffit and fascia with new siding
Total (Including materials and labor) $4,800
11) Front Porch.
a) Remove existing brick columns.
b) Romove screen.
c) Replace with wood railing.
Total (Including materials and labor) $1,000
12) Demo and punch out
a) Removal of all debris
b) Repair of any items damaged during remodel.
Total (including materials and labor) $2,950
Estimated Total Project Cost: $45,500
This is turn key, start to finish.
The roof still has alot of sagging. Would a home inspector, a roof company person or someone else be the person we would want to go out and verify that he has skipped over alot of work?
Suntzu18
[ Edited by suntzu18 on Date 12/22/2004 ]
For the roofing, a house inspector would be the person to send out. He hasn't been paid yet, has he? Does your HML require an inspection before disbursement, if so, have the inspector hammer him on it, make him fix it right before he'll disburse.
Some of the dollar amounts seem too low for what you're getting. Particularly for the flooring. Roof? I got 1300 sq ft installed, labor only, not including removal of old, with me buying material for $800.00. But, if he's doing support work, it's gonna be higher. Siding? I don't think you can buy the material for what he's priced out. Kitchen sounds too low, too... Doors and windows. Windows usually run $350.00 + LABOR ONLY for installation, and doors are usually on up there, too.
Good luck with it...
Jam, I think you hit on the problem, unless there is an additional form that specs out materials.
Everything is so vague, there is no specifics in regard to what is going to be done.
Just picking one little thing out of the contract.
9) HVAC
a) Install new HVAC unit for house.
Total (Including materials and labor) $3,500
What brand or A/C is it how many tons?
In the very least I would like to see that like this:
9) HVAC
a) Install new 3 1/2 ton Rheem A/C. New thermostat. Price includes new 50 amp circuit, shut-off, pad for A/C unit.
Total (Including materials and labor) $3,500
Price does not cover cost of additional duct work or any other up grades if required.
suntzu,
Surely this is not a "copy " of a contract you signed committing $45,500?!
Tell me it is just an incomplete outline, and not a copy.
If this is it, your contractor OWNS you. Hope he has a little integrity.
Your roofing section does not say anything about bringing roof back into plane. It only says to install supports. Supports are supports. They prevent further deflection. They don't repair sagging.
Forget the home inspector. You got what you contracted for, considering the contract details you posted.
Your contract doesn't say anything about insulation. figure on popping for the difference.
[addsig]
Suntzu,
I hope you do not think we are getting on you but you seriously need to learn how to write a contract, among other things.
There are so many precanned contracts that would have done you more justice for as little as five dollars.
The least of your worries is the insulation.
Is this guy a true licensed contractor or is he just your agverage handyman that has printed some business cards and passed them out?
Seriously, I would be surprised that a licensed contractor would even sign such an agreement.
Did you check him out?
Does he have General Liability and W/C insurrance?
Who pulled permits?
Bringing in an a home inspector at this time is a waste of time.
NC_Yank
Hey, NC_Yank, I think you hit on one of the major problems we have here in Georgia. There ain't no such thing as a licensed contractor. Any Joe Blow on the street can print up a card, and SAY he's a contractor, with no proof beyond his word, or maybe a buddy or two he convinces to vouch for him. I hear they're considering changing that, and maybe in the future contractors will be forced to be licensed, but as of right now, you just have to take a chance whenever you hire someone.
I have a question for everyone here...when I contract out work I generally contract out to subcontractors directly (or else I am dealing with GC's that have their own employees for the work--roofing/drywall/etc)...I've never had a contract...and things are usually written down similar to the previous poster.
I don't pay in advance--the work must be 100% completed and I hand them a check. The contractors love being paid so quickly and it modivates them to work faster. I don't think I have ever hired out a job much more above $5000. I have had the same guy do multiple projects but I leave things separate and am always in control.
I've had minor disagreements but nothing too serious.
Here's my question---What are the problems with this approach and what should I be doing differently??
Thanks!
Hey guys thanks for all the replies. Listen, I am here to learn, so if you guys tell me I am the biggest jackass in 4 counties because I did something worng, I will note what mistake I made, say thanks and learn form it. I definitely want to do things the right way...so fire away.
I posted a new turn to this dilemma but it was moved to the Law and Legal forum. Would you guys please, please take a look at it and tell what you think.
It is titled: "What is the Judge going to say?"
Thanks again.
Myfrogger - you have 2 big things going for you that are keeping you out of trouble. 1) Is you are paying only on completion. As long as you can find guys willing to finance your rehabs for you, why not? Paying only at completion won't keep you out of the hot seat if things get to a point where your guy just plain disagrees at the end of the job and he feels the only recourse is to lein your property. Then the lack of a contract is going to work against you, of course it could work against him too.
2) You are working with the same guys over and over again. That is more important than anything else. I have said it before, but most of the people who post here with horror stories the common thread is it is always somebody new that they are working with. They could be doing this for 10 years and it is always somebody new that screws them.
So while you are getting by without any problems and can probably continue, I would still recommend a detailed scope of work, to me it is just part of everyday life and the way to do business. If the contractor can'
t draw it up correctly, I will do it for him, I can't see doing it any other way so it is nothing hard to do.
suntzu18 - so that is the entire agreement?
There are so many places where you could get into trouble with that agreement. You need details, details and more details.
Just take the roof for instance: "Shingle roof with 3 tab shingles. "
What does that mean? Singles are usually specified by warranty. Are these 10 year shingles, 20 year, 30 year? Architectural grade? Color?
In the Kitchen : "Install new countertop. "
What kind of countertop? Tile, formica, granite?
You see what we mean?
Thanks for your reply!
Quote:
On 2004-12-23 10:32, jam200 wrote:
Hey, NC_Yank, I think you hit on one of the major problems we have here in Georgia. There ain't no such thing as a licensed contractor. ................................ I hear they're considering changing that, and maybe in the future contractors will be forced to be licensed, but as of right now, you just have to take a chance whenever you hire someone.
There is a website that one can go to find out state requirements. Yes you are correct about GA,..........I would advice you contact your state representative(s) and speak your mind about the problem.
While state licensing can not guarantee quality of work it does provide an avenue for the homeowner / investor to recover damages. NC has a program in which a small fee is collected on every permit pulled that goes to a Recovery Fund. It also puts teeth to the law including unlicensed contractors do not have to be paid when exceeding a certain amount. For NC it is 30k.
Visit the below website to find out your state requirements.
http://contractors-license.org/
NC
Myfrogger,
Do a contract when you can not afford to lose the money you are investing.
I have submited an article about contracts including the outline I use for my projects.
While not every contractor, probably many, do not use such outlines, it is very encompassing.
It is not designed to get leverage as JC espouses, but purely based upon what is fair for all parties involved.
Joel will probably post it in the next few days.
Rehab brought out several points that have kept many out of trouble that do not use detailed contracts............a good working relationship and at least being more detailed in the scope of work.
However this will only go for so long.........the odds are ultimately against you........especially those states that have no licensing requirements.
One small note as well............any contracts / documents should contain a provision that the GC or his subcontractors are responsible for insurance - General Liability and Workers Comp,..........Builders Risk is a different issue.
NC_Yank
Well I've fallen behind on the discussions here and didn't realize I was being personally addressed.
NC, I've responded to your criticims (similar to these here) over on the reply section of my article "Are Contractors Draining Your Equity." It's apparent that you've taken some offence. My comments to you remain essentially the same.
Suntzu18 provides a perfect example of whom I'm addressing. Suntzu asks a very basic question: "Do we have the right to send a roof expert or roof inspector back in to verify that the agreed upon has been done?"
Suntzu,
Of course you have that right. It's your property. In fact, you have a certain responsibility, not only to yourself but to future buyers, to go back and make sure all work has been performed correctly. The work should be observed CLOSELY and CONTINUOUSLY.
And yes indeed you SHOULD hire a home inspector and RIGHT NOW! I recommend you pay for several key inspections of this work. Ask your selected inspector for his recommendations of how he/she can help you through this significant renovation.
As for your original question about insulation and your summarized follow-up post of the scope of work, I can see no mention of insulation in that write-up. However, surely, the contractor expected to replace attic insulation since he's removing the sheetrock. Make sure he replaces that insulation. In fact, he won't likely attain a CO (certificate of occupancy) without it. Also, expect that he will replace floor isulation where subflooring and joists have been removed and replaced
It appears, however, that he would NOT have expected to replace wall insulation. It's my opinion from my limited knowledge of your situation that you should probably pay for that, since it would be reasonable for anyone to expect the insulation was already in there.
You see how that works?
Now as to the quality of this work, Suntzu it's up to you to EXPECT good quality and to tell your contractor. He'll provide it, but if you are silent he may let it slide thinking you don't care. If the wall painting reveals slight flaws in the drywalling point those out. Your contractor will gladly fix them. If the trimwork is not straight or well-joined, merely say so and your contractor will cure it. Some contractors gauge the amount of quality delivered by the feedback they get from their clients. So, be friendly, be supportive, and be clear in what you expect and you'll find that you'll get it. If not, it may be a crapshoot what the final product will be.
Suntzu,
I have addressed what I believe you should do in the Law Forum.
The one thing I would say here is to becareful that you do not appear petty about cosmetic issues UNTIL you have the money situation right side up, along with lien releases. Work should be done in a professional manner but as I stated in the Law forum, there is a phrase called "industry standard".........which is not my standard or yours....but you have to decide what is exceptable and what is worth fighting for.
JC,
The offense that I have taken is that you paint GC's with a broad brush. You are teaching people how to get leverage over GC,s and manipulate them.
At least this is how your post comes across to me.
I believe by doing this you do a disservice to those that follow such advice. The title of your very own book, along with its hype at your site literally paints a picture of a burly GC ready to pounce upon a poor old unsuspecting lady over a construction issue that you made up in order to put fear into the consumers heart.
It is this very thing that I find misleading. And your so called 'secrets" about how GC's look at siphoning off a clients money through various means, such as those nasty "change orders" again is painting a one sided story.
I have no problem with you teaching people how to interact with a GC or how to handle problems that come along, as will happen from time to time, but I will call you on it when you portray GC's as nothing more then fat burly drunks who are looking at bouncing on the unsuspecting client and stealing their money as you did on your website......that same attitude is coming through here at TCI.......just look at the heading of your last article "Are GC's draining off your Equity".......again you are painting a picture that GC's are shifty.
There are alot of GC's here including myself that offer the site FREE advise and information that comes from decades of knowledge and experience...........maybe you can understand why I have taken offense to such statements.
JC, I have no problem with you personally, you maybe well educated in contract negociations but I do question your methods and your experience as one that professes to have 30 years in the construction field and in the field of general contracting. I am still interested in weather or not our are a GC or have a GC business to make some of the statement that you have made.
I believe it is important for us to teach those at TCI, especially newbies, how to chose a contractor, how to develop a good solid contract and maintain a working relationship with all those that will in essence help them become good REI's.
Yes there are bad apples out there.........and unfortunately with many states that do not regulate the profession, there are few options that people can turn to other then the court system........and as you know, if if you win in court......it doesn' mean you will collect, you cant get blood out of a turnip as they say.
For those in their respective states that do not regulate the profession then this coming year is as good as any to speak to your representative.
I honestly believe that the best government is the one that is least involved in our lifes, however there are areas that should be regulated. It helps weed out the wannabe's from the professionals while at the same time protecting the consumer.
In closing I appreciate what Joel has done with TCI that allows all professions that make REI possible to come to a place so that we can help one another.
We do not need to create divisiveness among each others profession.
NC_Yank
Merry Christmas and Happy New Year everyone.
May God bless and protect this great country this coming year......and dont forget to pray for our men and women in the service.