Working With Your Subcontractors

Working with the subcontractors is one of the most challenging experiences in home building - especially in Owner Building. There is a delicate balance between remaining in control and keeping them happily on the job.

Subcontractors are some of the most independent people in the world.

If you live in an area where residential construction is booming, watch out!

It won’t take much for a sub to tell you to “stick it in your ear,” and walk off the job.

Sure you can back-charge him and find another subcontractor. But it will be a hassle and an almost certain delay. It will probably end up costing you money.

Choose Carefully

Much of this kind of trouble can be avoided by carefully choosing your subcontractors and then treating them with respect. Some subs always seem to have a chip on their shoulder. You may sense this during your initial interviews.

Also, ask about attitude when checking their references. You do not want a sub that is not sensitive to your desires as the owner builder.

Treat Them With Respect
Just remember, subcontractors are independent businessmen - treat them as such.

But also remember, it’s your house. You’re paying the bills. In the end, your will must prevail.

Using The Subcontractor Forms
When you are ready to build and have decided on the subcontractors you will use, it’s time to execute the Subcontractor Agreements. Start with the Subcontractor Agreement.

Get everything in writing

. . . especially exactly what will be done (Scope of Work), and who will provide what (materials).

Also execute the Subcontractor Self-Employment Statement.

This form asserts that the subcontractor is an independent business person and is NOT your employee.

This is important for tax and insurance reasons.

Review The home blueprints
Owner builders will want to go over the Plans and Specifications with the subcontractors again. Make sure they understand perfectly what you are expecting him to do.

Carelessness at this point will lead to misunderstandings, delay, and extra expense.

Getting Them On The Job

When you are ready to actually begin construction, you should contact all of your subcontractors and let them know approximately when you will require their services. As the time draws nearer, you can give them a specific date.

I like to begin about a month out. I'll `call a subcontractor and say something like, "I think we'll be ready for you on the job about such-an-such date. That gets you on his schedule well in advance.

And if he can't fit that time frame to his schedule, it gives you plenty of time to find a substitute.

That's one of the reasons you find more than one subcontractor for each job when you are putting your Cost Estimate together!

If something happens to delay construction, be sure to notify your subcontractors of the delay. One thing you don't want to do is have subs show up before you are ready for them. Once that happens, it tends to be a little harder to get them back when you need them.

Then I call back a week out to confirm where we are on the house and exactly when he'll be needed. Again there's a little wiggle room for you if his schedule has gotten jammed up and he can't accommodate your schedule.

Next I call two days out, one day out, and early the morning he is scheduled to be on the job - just to make absolutely sure he's going to show up. There's nothing more frustrating than sitting on a job site waiting for two or three hours for a subcontractor who isn't going to show up!

The First Day On The Job

When the appointed time arrives, meet each subcontractor on the job site. Have a copy of the Home Blueprints, as well as your Agreement with the sub. Again go over what is expected and resolve any questions.

Be sure the subcontractors understand that no extra work is authorized or will be paid for unless an Additional Work/Change Order is executed.

Spend as much time as you can with the subcontractors that first day to see that they, in fact, do understand what is to be done and to clear up any unexpected questions.

If you have to leave, make sure the subcontractors have a way of reaching you or your representative (husband, wife, etc.). Don’t think that you have to be there every minute. You don’t.

It’s just a good policy to be there the first day to help get them started. But it’s also a good idea to check back frequently to make sure something has not gone awry.

Dealing With Unacceptable Work

Perhaps the most challenging tasks in home building is dealing with unacceptable work. Do not hesitate to point out unacceptable work and request that it be corrected. Subcontractors deal with this every day. Some subcontractors are a lot like children. They will try to get away with as much as you will let them.

Others are very proud of their work and will try hard to do it right. Even these latter types will make mistakes. Its OK to sympathize with subcontractors who must spend extra time and effort correcting a mistake.

But remember, if they had done the job properly the first time, they wouldn’t be faced with making the correction. Do you want to live with their mistakes for the next thirty years? Be firm. Insist on acceptable quality.

On the other hand, be fair. If extra work is required, or something has to be re-worked because you forgot to tell a subcontractor just what you wanted, be prepared to pay for the additional work.

Serious Disagreements
If you have a serious disagreement with a subcontractor, you may have to terminate your agreement with him and find someone else to complete the work.

In such a case you should withhold a part of the payment due for work completed-to-date, at least until you have found a replacement, and have a firm commitment on what it will take to complete the job.

Under your original agreement, you are not committed to spend more than the original agreed upon amount.

As we mentioned before, it is often necessary to spend some money to correct poor work when a subcontractor is terminated, before the job can be finished.

Liens
Do not let a sub intimidate you with threats of a lien against the property.
A lien is like a suit in which the property is named to secure the amount owed. If your bases are covered, you can get the lien removed.

Liens are normally filed by subcontractors or suppliers who have not been paid. If you are withholding payment because of incomplete or unsatisfactory work, and a lien has been filed against your home building project, call your attorney.

Cleaning Up
You’ll notice in the Subcontractor Agreement, the third paragraph of the “fine print” states that the subcontractors will clean up after themselves. Some subcontractors will only do this if you make them aware that you are dead serious about this requirement, and that they will be back-charged if they don’t.

All subcontractors should be required to leave the home “broom clean.” When a subcontractor leaves a mess, either you have to clean it up, or pay someone else to do it, or the next subcontractor will have to work in a mess.

You can believe that this will not make the second subcontractor very happy. You should specify one particular area to stockpile trash until it can be hauled, burned, or buried.

PAYING SUBCONTRACTORS


Before You Pay subcontractors
In most cases you will pay the subcontractors on the job site. Before paying a subcontractor, carefully review the Subcontractor Agreement and any Additional Work/Change Orders concerning the subcontractor. Then get him to sign a Lien Waiver. Your lender will probably require it. If your lender doesn't furnish you one, use this one. If you're working with an attorney on your Home Building Project, make sure he takes a look and approves the form.

Then inspect the subcontractor’s work very carefully to determine if the sub has satisfactorily completed all of the work agreed upon. Never pay a subcontractors for half-finished work unless you have agreed to do so before the job began.

Here Is A Typical home building Situation
The framing subcontractor approaches you on Friday afternoon. He claims to be 90% finished. He’ll come back on Saturday morning and finish up. “It’ll only take a couple of hours.” Can you pay him Friday so that he can pay his men?

Being the good-hearted owner builder that you are, you agree. You even wisely hold back a little of his fee as insurance. Guess what happens. The subcontractor doesn’t show up on Saturday or Monday.

When you finally get hold of him on Monday night you find out that his truck broke down on Saturday and that he had an opportunity for a big job, which in order to get, he had to be there on Monday. He says he’ll come back the next Saturday and finish up your job.

If you believe that, there’s some ocean front property in Denver we would like to talk to you about! So when you finally get another framing sub to come in to finish up the work, you find out that the previous one has left a mess.

Not only have you been delayed a week, and are going to have to pay a premium to get someone to complete the work, but you are also faced with paying to straighten out the first one’s sloppy work.

This kind of thing goes on all the time. You are not responsible for meeting
your subcontractor’s payroll. You don’t owe him until the work is completed. Be understanding but tough. Don’t give in.

summary

Subcontractors are the life blood of any home building project. As an Owner Builder, the subcontractor can be your best friend. He has a great deal of experience about residential construction in your area.

He knows code requirements (to get his work approved for payment!).

A good subcontractor can help you make timely decisions on the job.

Don't scrimp here. Spend the time and effort to find good subcontractors.

Check them out thoroughly. Treat them with respect. Be prepared to be flexible. Remember, the subcontractor is an independent businessman. He is often juggling several jobs.

He can't always control everything that affects his schedule. It won't kill you to lose a day or two occasionally out of your well-crafted, very tight construction schedule!

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For more on Working With Subcontractors,
see Lesson Thirteen of our online course
Successful Home Contracting.

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