When Do You Collect Final Payment

big steve

I had always had my payment schedule to receive final payment on completion of job.Not being a college grad or one to think the worst of people, I found myself with never ending punch lists(sometimes containing items not even remotely related to my work),people not wanting to make final payments for additional work that wasnt complete.I might be slow on the draw but it only took me about 5 years to change my wording to "final payment due upon final inspections",I try to get paid for my extras as they arise.This seems to work much better for me.And there are no more freebies like while you are installing that medicine cabinet can you hang these pictures and put these new blinds on the windows.
Thanks ,
Big Steve

thom

I went with really small payments on the back end. As we move beyond half done, the progress payments come quicker and smaller.

If the final payment is relatively small you will have much less trouble collecting it.

There are oftentimes a bunch of little things that one could debate about who is responsible. I would list each of these things with a detail price then a n/c. Makes people feel guilty about stiffing you.

big steve

I used to leave 10% for the end plus extras,getting paid for extras immediately as they come up is a big step in the right direction. I also state on my proposals that any work not on the plans or listed on the proposal will be charged at an hourly rate only after written authorization from HO.I still feel guilty charging for every little thing But it seems if i do any small thing for free it opens up the flood gates and they expect more and more .When i do charge for everything , they dont expect freebies.

Thanks for your input, Steve

AtlanticWBConst

In our contracts:

......At the time of completion a walk-through will be performed with the customer. Any defects, touch ups, and ONE (1) final “action” (effort/visit to complete the contracted work to the client’s satisfaction) are included as part of this contract. These items will be addressed at this time, but shall not delay this final payment....

__________________
- Build Well -

AtlanticWBConst

BTW - Why is this post in the "Help Wanted or Looking For Work" section??

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- Build Well -

big steve

Its my first time sorry it wont happen again i dont know how it got there.Probably get more feedback if i change . thanks for pointing that out
steve

Ed the Roofer

I moved it to the business forum. No problem and a very good topic too.



I don't have my contract at home with me, but might remember to load some of my phrases that deal with this.

Basically, the definition of "Fianl Completion" is defined per the legally accepted version, which states that as long as the finished results allow the product or service to be used for it's intended usefullness or service, it wil be considered complete, even though minor punch list items may remain, but they will not affect the payment schedule.

I also address this issue in my "Final End Of Job Evaluation For Customer Satisfaction", form.

The customer can either fill in the blank sections of the form or write in an answer to one of the 10 queations, which identifies some sort of dissatisfaction or remaining items yet to be done per the contract or one of the Update To Specifications, Change Order forms that was signed.

They have 7 days, either from when the form is turned in to them or from the receipt of the final invoice, whichever comes first, to identify any problems requiring to be on a punch list.

They may hold UP TO 5 % of the original base contract amount as retention, or an ageed upon sum between the 2 parties as a retention amount.

Ed

Tiger

This is the key. When the final payment is 50% you can get some complaints with negotiations for a lower payment. When the final payment is minimal the incentive for negotiating is lost.

Dave

big steve

Thanks Ed, I tried to move last night but gave up after a while.Im still learning where everything is here. I changed my wording because of a couple realy bad homeowners Completion of job can be realy stretched out.I remember a lot of jobs my grandfather used to do were on a handshake.Times have realy changed .Around here you almost have to be a lawer or some of these people will realy take you for a ride.Thanks again
Steve Ps.My daughter said i should put a smiley face here

Ed the Roofer

Ha-Ha. LOL.

When my 5 year old, Little Eddie is sitting by me, he always wants to add a smiley face too. He is still sleeping, so I wil put one in for him, back to your daughter.

Google the: "Legal Definition Of Substantial Completion" and see what it clearly states as interpreted by the law and case history precedant.

You do NOT have to be done with every minor punch list, just the amount that makes the application or service useful as its intended purpose.

Ed

P.S. You are not able to move a post into a different forum, just moderators. If it comes up again, click on the report post button and request that one of us do that for you.

Double-A

We leave very little for the final payments. On the order of 2% on most jobs.

I think along the same lines as Tiger; the less there is left for final payment, the less there is to negotiate on to get that final payment. We also try to address any problems as soon as they are brought up. We strive for a zero-items punch list. Having someone on site every workday, and walking through the job with the client also helps.

Any problems are brought up early and changes/corrections are made then, before they can grow into doubts, anger, angst, etc. The less our clients have to deal with the problems, the less they remember them, and the smaller the problem seems to them when the final payment is due.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

d-rez

My contracts use the term 'Substantial Completion' and further define it as when the Project can be used for its intended purpose. I get the final payment upon Substantial Completion, but am still obligated to complete a punch list(ONLY ONE) of items, then the HO signs off on a 'Final Completion', and the warranty begins.