What % of bill to pay builder before snag list complete?

T

txirimiri

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Hi there

Currently doing works on our house which are worth approx 30 grand before VAT. Rough split of 20 grand going to subcontractors and 10 grand to builder.

Work is going well and on the way to completion in the next week or so. No money was asked for upfront, although we asked for a suggested payment schedule on the assumption that we would have to pay 25% or so before work started and then another lump sum at mid-stage.

Contractor has just sent us the final valuation - I think so we can have a look through first and make sure everything is as agreed before we pay.

Any ideas as to what % we should suggest that we hold back on til snag list is drawn up and finalised? We also need 2 SEI certs from builder and plumber. I was thinking of suggesting that a) they send us the relevant certs, b) we pay 90% of the bill before builders holliers and 3) we do up snag list after builders holliers and pay final 10% once snag list has been completed.


Does that sound reasonable?
 
Do you mean that you have almost completed 30k worth of works without shelling out a penny to date?! And the builder did not ask for any draw or stage payments? If that's the case I'm very surprised and wondering what the reason for withholding anything at this stage is. Surely the builder has demonstrated a trust in you to pay. You could do likewise with him. I believe withholding a final payment is very common but in those circumstances stage payments would be paid.

Have you a written agreement or otherwise with the contractor about payment at all?
 
Yes. I assumed that we would pay in stages and asked the contractor before the works started how he wanted to stage the payments. He said there was no need to pay anything up front and that as it was a relatively small job that we could pay it all at the end.

I'm not intending to 'withhold' anything, merely wondering what constitutes 'the end' of the job. Obviously, until all the works are completed to our satisfaction, including the snag list, the job is not finally completed. However, as its unlikely that the final bits and bobs will be finished before builders holidays and as the builder has sent us what he terms 'a first valuation' to look at, I presume as a precursor to a final bill, obviously I want to pay him the vast majority of the money before holidays, not least because he'll be needing to pay his contractors I presume before they all go off for holidays.

The question is what % would be reasonable to pay now and what % do we pay on final completion of the job?
 
The usual way is to have a percentage which depends on the size of the job. The normal way it would be done is that (say) 5% is held back until practical completion - the point where you can move in to the house, then half of that is paid at that point, with half kept back for the defects liability period 6mths-1yr depending. The idea is that the percentage should be enough to make sure that it is worth your builder's time coming back to finish the job. In a small job, the percentage may be as high as 10% total, with 5% held back for 6mths. I'd guess that if you hadn't agreed on a defects liability period at this stage, your builder may have some issues with you now trying to impose one.

Given that it wasn't agreed before the project started, you might not get away with 10% - have a rough idea of what defects are likely, how much it would cost to get them dealt with, and use that as a bottom line.

Note: because it appears you have not used a written building contract, it is likely that you are not legally entitled to keep any money back. That only becomes an issue if things "go legal" though.
 
..have to say, as being the trade myself, if retention isn't agreed before the job, it's too late, after. A deal is a deal, I'd have thought.
 
I wasn't thinking in terms of retaining a % for 6 - 12 months. Merely not paying 100% until job is 100% complete.

Anyway, thanks for the feedback. We are meeting builder who has been overseeing the job on Thursday to go through where things are at and what remains to be done. I guess based on that we can work out a reasonable deal on payment.
 
galwaytt said:
..have to say, as being the trade myself, if retention isn't agreed before the job, it's too late, after. A deal is a deal, I'd have thought.
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You could turn that around and say if the payment schedule isn't agreed before hand, it's too late for the builder to assume anything.

You have to hold something back - start at 10% and haggle down to 5%
 
Thanks for the feedback - I wonder though whether my original post was less clear than I thought as people seem to be taking this up as me trying to get out of or delay paying for as long as possible, which is not the intention at all.

Anyway, I had a chat with the builder. He reckons that the work that remains to be done represents about 8% of the initial cost agreed. We are meeting up tomorrow at the house to go over where things are at, so if we both agree on the assessment of what has been completed and what is pending, hopefully everything should work out fine - we pay 92% and the remainder when everything is finally done and dusted to everyone's satisfaction.
 
txirimiri - I got what you meant about holding back some money until job 100% complete.
It sounds as if you may have a good relationship with your builder so I would have no hesitation discussing it. I would think somewhere between 5 - 10 % to hold back until all complete.
Ideally it should be discussed before. Keep us posted on how it goes with him.
 
We are doing work on our house.
They way it is laid out in the contract is that builder gets paid every 4 weeks for work done less a 7% retention.
At the end the architect will do a snag list and all going well the builder will receive half the retention (3.5%).
The other half of the retention is due to be paid to the builder 6 months after completion, providing no issues arise.
Sounds like a fair way to me.
 
Well, I was worrying about nothing. We had a look over the house together - everything he said was done, was done and everything he said was pending (and therefore not yet to be paid for) was pending.

So a cheque for 92% approx is in the post. Of the remaining 8% looks like half will be done before builders holidays and the last bits and snag list mid/end August, so guess we will do the final payment then. Don´t see the need for retaining any proportion of the fee for 6 - 12 month period.
 
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