Typical architect and contractor payment schedule
The house in the pic is on Dean Street btwn NY Avenue and Brooklyn Avenue. They did an amazing job recreating the original details of this frame home. Check out the streetview for the before pics!
adam_dahill
in General Discussion 8 years and 3 months ago
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jmpearce12
in General Discussion 8 years and 3 months ago
I’m planning for a gut renovation of a 3 family property. What is the reasonable typical timing on when architects and contractors are paid? ie. all up front, in pieces as work is delivered, or at end or project, etc. I spoke with an architect who provided a fixed cost quote to file plans; they asked for about 90% of the total upfront when they start drafting the plans and a final pay payment of a few hundred dollars at the very end for final sign-off when entire renovation is complete. Is this typical? What is the typical payment schedule for contractors?
slopefarm | 8 years and 3 months ago
OMG no, don’t ever pay anyone 90% for anything up front!!!! Different architects work differently — some charge by time, some by value of project, some break it into phases.
Contractors should get progress payments; how many increments this is divided up into will depend on how long or complex the job is. A deposit to start is reasonable, but after that, you should never let the payments get ahead of the work.
Augustiner | 8 years and 3 months ago
red flag alert – this architect sounds like an idiot, start your project right and go with someone else.
Here is the rule: hold back as much as you can. No more than 30% advance and then stagger it out on a weekly or bi weekly basis and connect those payments to milestones that are agreed upon in the contract. This is not optional, unless you want your project to stall and you will suffer eternally in construction limbo.
Quite frankly with your lack of knowledge you should consider professional advice. Or you have to calculate 40% more than you budgeted for your renovation. We’ve all been there, thinking we are sucessful in XYZ and a gut renovation can’t be that more complicated. hahaha.
jimhillra | 8 years and 3 months ago
We generally ask for a 10% retainer when the contract is signed, and then apply that retainer to invoices after we’ve obtained DOB approval.
a2chitect | 8 years and 3 months ago
We ask for a retainer at the beginning and work on a percentage basis of the construction cost. We then invoice on percentage of completion of each design and documentation phase. As a rule of thumb, you will be paying your architect a large portion of their fee before a contractor begins their work as they will be complete with most of their responsible scope. Only if they are involved in construction administration will they still have a decent portion of the fee remaining until the end of sign-off.
BKALLDAY | 8 years and 3 months ago
Anyone who is asking you for 90% upfront is a fraud. Typically I have done 1/3, 1/3 & 1/3. I have held the last 1/3 until the punch lists of all contracted items and change orders are completed, all required inspections have passed and if necessary Liens removed which could take awhile because some contractors forget.
JPDA | 8 years and 3 months ago
Every architect will ask for a slightly different amount as a retainer/deposit and then generally bill on a “phase-by-phase” basis. Note that there are typically 3 design phases (and permitting) before construction starts, so as mentioned above you will most likely be paying 60-75% of the architect’s total fee before the first hammer starts swinging on site. It is also common as Jim mentioned to apply the retainer towards the architect’s final invoice. Most importantly, except in cases where you are hiring an all-in-one “design-build” firm, the architect and contractor are separate entities and will bill independently of each other!
BKALLDAY | 8 years and 3 months ago
I don’t know about some folks but there is no way in heck I would pay 75% upfront. A retainer sure but if your contractor is not solvent enough to take a retainer or a small percentage upfront then (it has been my experience) you are going to have a sloth working your job and by that I mean – Don’t show when they say. Always a delay of materials. Can’t reach them. The D crew arriving and doing shoddy work. Problems with the punchlist items and of course the tried and true nickel and dime-ing you to death. Why? Because they are using one job to pay for others and have no cash flow to support their business. I had one contractor come so highly recommended you would have thought he would enter walking on water. All he was doing was leveling and replacing all of my floors. He took 5 weeks and got nothing done. Since we were literally walking across beams and plywood, we had to hire another guy who was fantastic. Came in knocked it out. Beautiful work. After threatening the first contractor he agreed to repay me the bulk of my down payment. Sent his girlfriend in while he sat in the car. She asked to take a picture of my Parlor Floor (not done by him) and I noticed my floors on his website. Had to get on him to remove those pictures. Now not everyone will have that experience but many, many contractors are a form of scum and they know it when they start out that they will be treating people poorly.
JPDA | 8 years and 3 months ago
Just to be clear – the Architect is NOT your GC. The contractor will get a small deposit upon signing the contract with the owner. They will then submit payment requisitions to the architect for review at regular intervals over the course of the project. The architect will only certify payment for work that has been completed or materials that are stored on site. There will also be Retainage, where a portion of the certified payments will be held back (generally 10%) until the end of the project.
rana-foroohar | 8 years and 3 months ago
We are nearing the end of an 18 month gut renovation project. Our architects bill us by the hour, sending us invoices at the end of every month. Our contractor required a roughly 15% deposit when we signed the contract. We’ve made several payments since in similarly sized chunks, but spread out based on when he needed to order materials. Each time he requested payment, he sent us a report on what has been completed and what work remains outstanding. The contract specifies that $10k is being held for sign-off at the very end of the project. At this point the work is about 80% done and we’ve paid about 80% of the contract amount.
rana-foroohar | 8 years and 3 months ago
We are nearing the end of an 18 month gut renovation project. Our architects bill us by the hour, sending us invoices at the end of every month. Our contractor required a roughly 15% deposit when we signed the contract. We’ve made several payments since in similarly sized chunks, but spread out based on when he needed to order materials. Each time he requested payment, he sent us a report on what has been completed and what work remains outstanding. The contract specifies that $10k is being held for sign-off at the very end of the project. At this point the work is about 80% done and we’ve paid about 80% of the contract amount.
randolph | 8 years and 3 months ago
my advice would be to just scrap the entire project, this GOP tax bill is going to cause area home prices to drop 10% or more in the next few years. just sell now while you can!