How much to hold back for incomplete job

[deedeetoo]

We just had our kitchen remodeled. It was a big job involving moving walls, windows and plumbing, in addition to the standard new cabinets, counter, appliances, backsplash etc. It is almost done. The one thing that is missing is a piece of trim that goes along the top of the cabinets in one section.

So here is the story with the trim - the designer initially didn't quite order enough. This is custom trim and there were three pieces missing from the initial order. The contractor discovered that he was short right before Christmas. The factory where they produce the cabinets and trim was shut down for two weeks for Christmas so the new sections didn't get ordered until early January. The box arrived at the designer's in late January, who gave it to the contractor, who said it only contained 2 of 3 missing pieces. We don't know whose mistake this is. The factory claimed they shipped all three pieces, the contractor claims it wasn't there. The designer re-ordered the now one missing section. It has not come in yet. Designer says soon, but last time soon took two weeks.

So the contractor says that since the work is substantially done, he wants final payment but to hold back $500. Our contract says final payment is due upon completion. The job is not complete. There is a fairly obvious section of cabinet in our very expensive (to us) kitchen that has a whole above it. We are debating what to do. Is $500 enough to hold back? Should we hold back more? The entire amount we still owe is $3885 which seems like too much to hold back at this point. We have no reason not to trust the contractor, but still you here horror stories of them not ever finishing and this is a very obvious section to an otherwise beautiful kitchen. Any advice on what to do?

 

[daughtersrus]

We just had our kitchen remodeled. It was a big job involving moving walls, windows and plumbing, in addition to the standard new cabinets, counter, appliances, backsplash etc. It is almost done. The one thing that is missing is a piece of trim that goes along the top of the cabinets in one section.

So here is the story with the trim - the designer initially didn't quite order enough. This is custom trim and there were three pieces missing from the initial order. The contractor discovered that he was short right before Christmas. The factory where they produce the cabinets and trim was shut down for two weeks for Christmas so the new sections didn't get ordered until early January. The box arrived at the designer's in late January, who gave it to the contractor, who said it only contained 2 of 3 missing pieces. We don't know whose mistake this is. The factory claimed they shipped all three pieces, the contractor claims it wasn't there. The designer re-ordered the now one missing section. It has not come in yet. Designer says soon, but last time soon took two weeks.

So the contractor says that since the work is substantially done, he wants final payment but to hold back $500. Our contract says final payment is due upon completion. The job is not complete. There is a fairly obvious section of cabinet in our very expensive (to us) kitchen that has a whole above it. We are debating what to do. Is $500 enough to hold back? Should we hold back more? The entire amount we still owe is $3885 which seems like too much to hold back at this point. We have no reason not to trust the contractor, but still you here horror stories of them not ever finishing and this is a very obvious section to an otherwise beautiful kitchen. Any advice on what to do?

I would figure out how much would it cost you to repurchase this piece of trim and have it installed and deduct that amount or $500. Whichever is greater.

 

[Happy Snowman]

I would hold back the entire final payment. It is not done, end of story . It's a lot easier to get a contractor to come back to finish if he is waiting on 1/3rd of his pay--or whatever, vs $500 that is easy enough to write off for him...

 

[Luvchefmic]

So the contractor says that since the work is substantially done, he wants final payment but to hold back $500. Our contract says final payment is due upon completion. The job is not complete.

Who cares what the contractor says or wants ? Why are you letting him tell you what to do ?
If it were me he gets paid in full when the job is done and not until then; just as your contract states.

 

[TAX GUY]

If everything else has been positive and you get that warm fuzzy feeling, then hold back $1000. Explain to him you feel more comfortable holding back $1000 (or what ever amount you feel is enough to keep him honest and allows you to sleep at night). At this stage, he's already paid for the material and its his profit that's remaining.

 

[lizabu]

It sounds like he completed most of a very big job. I think you need to find out what it will cost to install that one last piece. If you pay he's probably not coming back. Like daughtersrus said, hold back what it will cost to install that one piece or $500 whichever is greater.

 

[piccolopat]

If the missing trim is the designer's fault and not the contractor's, I think the request is reasonable. I think TaxGuy's suggestion of holding back $1000 instead of the $500 is a reasonable counter proposal.

 

[Colleen27]

Personally I think that is reasonable, particularly since it doesn't sound like any of this has been contractor error - he has no role at all in the ordering/shipping processes and if it was ordered and shipped correctly that should be a simple enough matter to for the designer and manufacturer to prove. But presumably the designer and manufacturer have gotten their pay, only the contractor is stuck waiting for his income based on other peoples' errors. And that happens, it is part of the job, but it still sucks because he has expenses that can't be put off while waiting through all these delays (like paying his crew). $500 is a large enough sum to ensure he will come back to finish - installing one section of trim isn't time consuming or complex - but not so much that holding it back presents major hardship for the contractor who was probably budgeting based on having that final payment months ago when the project should reasonably have been complete.

 

[nkereina]

I would be suspicious of the contractor telling you to just withhold $500. That's a small amount and one he likely won't be concerned about collecting, which might mean the rest of your job will be put on the backburner if not completely forgotten about. I'd be willing to pay him half, with the idea that holding onto half will compel him to finish the job.

 

[marmalade]

It wasn't the contractor that made the initial mistake, and it wasn't his fault the company was shut down for two weeks, it also wasn't his fault he was only give 2 of the 3 pieces of trim. The contractor has to pay his employees (probably already has) for the work that they have already completed. I would pay him what you owe minus the $500, especially since you said it is now a beautiful kitchen and you have no reason not to trust him.

On the slim chance he doesn't show up to finish the job, how much would it cost to hire someone to install the missing trim? More or less than $500?

 

[deedeetoo]

Just to clarify on the subject of fault...

The initial order was short due to an error on the designer's part. This is clear.

It is not known who is at fault for only 2 of 3 items being received/installed on the reorder. The designer ordered all 3. I saw the order so know this is true. The factory says it shipped all 3. The contractor says he received 2. The designer said that the missing piece was smaller than the other two and the contractor may have missed it in the packaging. The contractor says he didn't, but the packaging was already discarded when this "he said, she said" started so it was impossible to check. It is possible the contractor accidentally discarded the missing piece. Regardless, the designer placed another order (at her expense) to get the last piece. We actually do still owe her money. She has said she won't collect until it is completely done.

I have not responded to the contractor yet. I am feeling that $500 is not enough to make sure he comes back. Then again, its probably only an hour of work for him to install and he lives the next town over from us so its very easy for him to swing by. He is a carpenter by trade so would install this himself. I can't imagine he won't work for an hour to get the $500. But, maybe $1000 would be better. I do know he has to pay the painters out of the final payment so I don't really want to withhold the whole thing.

 

[hereyago]

I would stick to the contract and not pay anything until it is done.

 

[JustCallMeMommy]

I was thinking 10% because that is what my insurance company holds back until completion, but, in this case, that is less than the $500. You said you "still" owe $3885, so maybe 10% of the initial amount?

 

[aaarcher86]

I'd withhold the full amount as per the contract that you both signed. If he needs the money for some reason he will get the job done faster.

Let him know you appreciate the work done so far and love it, but don't feel comfortable giving him most of the final payment until this is complete. The dilemma isn't you're fault! It's not personal. It's business. There's a contract for a reason - to protect you both.

 

[yoopermom]

As the wife of a contractor, I have some sympathy for him, since there are bills that have to be paid, no matter what, and many contractors run very lean.

Since you know that the piece of trim is coming (per the designer), it would not be impossible to have someone else install it if your contractor would happen to renege. Popping in a piece of trim is not extremely difficult, especially if the rest is already there. Personally, I'd short him the $500 until the job is done, but if you're more comfortable with $1000 go with that.

Terri

 

[JoeA]

I would be suspicious of the contractor telling you to just withhold $500. That's a small amount and one he likely won't be concerned about collecting, which might mean the rest of your job will be put on the backburner if not completely forgotten about. I'd be willing to pay him half, with the idea that holding onto half will compel him to finish the job.

This is pretty much my thought. He may decided to "walk" and not come back over $500. I think you have to make sure there is enough "incentive" for him to finish the job to your satisfaction

 

[Amy]

This is pretty much my thought. He may decided to "walk" and not come back over $500. I think you have to make sure there is enough "incentive" for him to finish the job to your satisfaction

This. We had a 2-story addition put on our house years ago, so it was quite expensive. Unfortunately for the contractor, DH knows a lot about construction, so DH would inspect their work daily and ask for things to be re-done. This even included making them re-pour the footers for the addition. Anyway, once everything was done, I was still waiting for ONE shelf for the cabinet in the new bathroom; "It's on backorder; should be here in a couple of weeks." Contractor wanted final payment, said he'd drop off the shelf once it came in. Nope, we held back the entire final payment. Got my shelf within 2 days!

 

[TAX GUY]

This. We had a 2-story addition put on our house years ago, so it was quite expensive. Unfortunately for the contractor, DH knows a lot about construction, so DH would inspect their work daily and ask for things to be re-done. This even included making them re-pour the footers for the addition. Anyway, once everything was done, I was still waiting for ONE shelf for the cabinet in the new bathroom; "It's on backorder; should be here in a couple of weeks." Contractor wanted final payment, said he'd drop off the shelf once it came in. Nope, we held back the entire final payment. Got my shelf within 2 days!

The big difference here is that you had issues right out of the gate and they continued. With the OP, this seems to be the ONLY issue and at that, it's over a missing piece of trim.

 

[Amy]

The big difference here is that you had issues right out of the gate and they continued. With the OP, this seems to be the ONLY issue and at that, it's over a missing piece of trim.

True. I guess after our experience, we learned not to trust contractors 100%. If the OP trusts this guy and is comfortable withholding only $500 or $1,000, that's fine.

 

[ronandannette]

Just to clarify on the subject of fault...

The initial order was short due to an error on the designer's part. This is clear.

It is not known who is at fault for only 2 of 3 items being received/installed on the reorder. The designer ordered all 3. I saw the order so know this is true. The factory says it shipped all 3. The contractor says he received 2. The designer said that the missing piece was smaller than the other two and the contractor may have missed it in the packaging. The contractor says he didn't, but the packaging was already discarded when this "he said, she said" started so it was impossible to check. It is possible the contractor accidentally discarded the missing piece. Regardless, the designer placed another order (at her expense) to get the last piece. We actually do still owe her money. She has said she won't collect until it is completely done.

I have not responded to the contractor yet. I am feeling that $500 is not enough to make sure he comes back. Then again, its probably only an hour of work for him to install and he lives the next town over from us so its very easy for him to swing by. He is a carpenter by trade so would install this himself. I can't imagine he won't work for an hour to get the $500. But, maybe $1000 would be better. I do know he has to pay the painters out of the final payment so I don't really want to withhold the whole thing.

How EXACTLY does your contract define completion (v.s. "substantial completion") and what does the contract say is the remedy for defects and deficiencies? Given the entire scope of the work, this trim represents a very, very small percentage of both the materials and labour (and the cost of each). It is more accurately a "deficiency" in workmanship - something like this should be dealt with under the terms of the workmanship and materials warranty that "should" be spelled out in your contract. I'd imagine you did some sort of due-diligence on the track record of the company, including the satisfaction levels of past customers. If this is a reputable company, and I'm sure you think it is or you never would have made this magnitude of a deal with him in the first place, pay your bill and hold back the $500, which is MORE than enough to cover the liability if need be.

Having worked extensively in this industry (albeit in a different jurisdiction where laws and customs may be very different), all of these contingencies were always clearly spelled out in the terms of our contracts. If a homeowner tried to hold back a progress payment instead of availing of the other remedies specified in the contract, I'd lien their house.