I received a note from someone’s customer the other day. In part, it said:
My wife and I are undergoing a very large fix up to a house that we have purchased. Our contractor has agreed to charge us 20% Overhead & Construction fee to cover their expenses. What should this 20% include? Does it include scheduling the painter, checking the light trim order to insure accuracy, things like that? Please advise?
My response was to go back to the original agreement and see what it had to say. If anything was not clear, then he and the contractor needed to get those details worked out. Then the additional information needed should be put in an Additional Work Order and signed by both parties.
I hope there is an original agreement to go back to. This is a classic case of a contractor either writing an incomplete contract or not writing a contract at all. It is the contractor’s responsibility to put in all the details, not the owner’s. When an owner is asking these kind of questions, it is just a matter of time before the whole job falls apart.
(I also told the owner that in my opinion, a 20% fee was dirt cheap for this kind of agreement. This contractor needs to learn how to charge for his work.)