WWYD - Contractor/Friend and Job Costs Concerns

This is a little long but I will try to condense the situation. I had extensive work done to my house prior to us moving in. Initially my contractor, who is a friend, (I know, never mix business with friendship) agreed to take on the job knowing that headaches would arise. I was able to procure a streamline loan to do most of the work since it required extensive repairs. Along the way there were issue, as expected, which caused us to move funds that were allocated from one portion of the job to other areas that needed attention.

Now, mind you he decided to do this with two people and when I asked why he indicated if he used more than two we would never stay close to the funds allocated for my job. I also paid for A LOT of the materials out of my pocket to try to make sure we don’t have a huge balance towards the end of the job. Fast forward six months later and I’m being told that I owe 26k more than the loan covered. This is in addition to the 17k that I already paid out to him in material costs that he said wasn’t covered and that I didn’t bother to question.

I also was able to get my hands on one of the original bill for the roof work that was done and noticed that he doubled the charge of the roof and windows ( as an example, the roof costs 1,000 and he billed me 2,000). I know this because I called the roofing company to repair a portion of the roof and asked them to send me a copy of the original work order. He doesn’t know I have this and I’m suppose to sit down with him to go over the numbers because, while we’ve done extensive work, I don’t see how I can be over 43k (17k material plus the 26k he states I owe). Not only that, now that I’ve seen this original receipt I’m now wondering how many other areas were marked up exorbitantly.

Throughout the job I asked multiple times to see receipts but nothing was produced and I didn’t bother to complain since he was going through a lot personally and the job wouldn’t really make him any money. Oh, my house is approximately 70% completed. It is in livable condition but nothing that I’m completely satisfied with. The work was done decently but I’m going to have to find a way to finish the rest on my own because I exhausted most of my funds to get it to this point.

Message edited 1/17/2012 4:22:15 PM.

Re: WWYD - Contractor/Friend and Job Costs Concerns

If you are paying for materials then he needs to produce the receipts. Did he charge you $2000 for materials for the roof or did that include the labor as well?

Re: WWYD - Contractor/Friend and Job Costs Concerns

SecreTTCer, that was an example. For the roof it was contracted out. My contractor didn't replace the roof but the work was done by a sub. He didn't do any work from what I understand.

Re: WWYD - Contractor/Friend and Job Costs Concerns

I am just trying to understand your post. Contractors tend to charge double what it costs them. That is their usual mark up.

So if a window costs $250 they usually will charge $500 for the cost of the window and the installation.

Re: WWYD - Contractor/Friend and Job Costs Concerns

What I'm saying is that the contractor in question sub-contracted the job out and is charging me double. It didn't cost him anything because he didn't do the work - another company did. So, is it normal for him to not do any work, hire a third party, and then charge me double?

If so, I could have found the company myself and paid them directly to put the roof up for me. I just wish I had known this was what would happen.

Re: WWYD - Contractor/Friend and Job Costs Concerns

Yes, contractors make money when subcontractors do the work. That is how they make a living. Of course, you could have hired the roofer. But the point of hiring the contractor is that he oversees everything. You don't have to do a thing in theory. Also, contractors get better prices than a homeowner would have.

I am in the midst of a large scale renovation; I gutted an entire 4000 sq foot house. The contractor who is absolutely amazing subcontracted some of the work. This included electrical, plumbing, tile work, and the staircase railing. Electrical and plumbing are licensed professionals so the person doing the work must be licensed. Tile work and the railing is more specialized. The contractor is making money off of this because he is supervising those jobs. That is how they make money!

Re: WWYD - Contractor/Friend and Job Costs Concerns

Re: WWYD - Contractor/Friend and Job Costs Concerns

Well, because I know this the first time he used this vendor is probably why I'm questioning the price. I know and agree he is entitled to making money off of the job but I honestly didn't think he would sub the job out and charge me double. I assumed he would make his profit on the work that he and his guys performed. Either way I appreciate the feedback and just wish I did my homework beforehand.

Re: WWYD - Contractor/Friend and Job Costs Concerns

They do make their living either doing work or managing the process of the work, whether it be in house work or subcontracting.

However, I would say that charging double isn't the norm on everything. There really isn't a "standard" mark up of subcontractor's work, however genreally the smaller $$ it is the mark up tends to increase.

What type of agreement do you have with this contractor? To me, it sounds like he's not managing the cleint or the job correctly.

telling you that you owe 26K for work done is not how its supposed to work generally.

He should have quoted the job in total at X lets say 50K. then for changes/unforseen issues, he should be brining them to your attention and having you sign off on them prior to the work starting on that section. ie: framing is rotted, needs ot be replaced, this will cost an additonal 4K, sign off on change order. If this is the case, you shouldn't really know how much the roof is costing you unless it was a change order you signed off on.

if you're working on a cost plus basis, time and materials, he should be giving you invoices and you shoudl be paying that list of invoices plus his markup for overseeing that work and should be billing you on timesheets for his guys.

I have no idea how you can be 17K over in materials you didn't pay for and 26K in labor without you knowing it. Either he hasn't managedthe process and communicated it to you, or you haven't been listening. And somewhere along the line, he should have documentaiton as to A) you agreeing to all the extra work(assuming fixed bid), or B) at least him incuring all these extra costs (time and materials)

if he doesn't, he's either a friend working on a handshake who mismanaged the process, or a complete moron, 43K isn't a small number to most normal people doing renovations, even on a 200K renovation, assuming the customer is good for it and in agreement that is a stupid assumption.

Message edited 1/18/2012 11:21:22 AM.

Re: WWYD - Contractor/Friend and Job Costs Concerns

It doesn't sound like he's doing something for you for nothing. I don't know what you could do at this point.

Tell him you've exhausted all your funds and that you'll do the rest of the work piecemeal.

Not for nothing - if I was helping a friend out - I would charge cost for all materials and bill them labor. I wouldn't mark up anything. If I did - then you're not a friend, kwim?

If I had balls I'd approach him about the roof - "hey, ABC Company sent me this receipt for $1000, did you mean to charge me $2000 for that? Can you reconsider your mark-up?"

If he's charging you double for subbed work AND billing you for labor - he's definitely making money on you.

Re: WWYD - Contractor/Friend and Job Costs Concerns

Re: WWYD - Contractor/Friend and Job Costs Concerns

Re: WWYD - Contractor/Friend and Job Costs Concerns

From the other comments in this thread I take blame for this in that I should have been more involved and been a hawk on the project. We did change things midstream though but no work-order or statement of work exchanged hands. We just kept processing the checks as they came in from the bank and he handled all of the financing.


If you're referring to my post, I'm not sure if my point came accross correctly.

I personally think that the person who should be documentating the change orders and making sure that everyone is on the same page is the contractor or at the very least telling you about the cost of the changes.

that doesn't happen in 100% of the cases, but I'm still very surprised that he could let the number to turn into that large amount without either many conversations or many change orders,thats a lot of money.

Friends doing construction or any work for someone, it gets difficult as to where to draw the line and manage expectations. sometimes people go out of their way to help their friends, others treat them worse than other clients since things aren't as formal, things aren't as documented, and there is a misscommunoication

Re: WWYD - Contractor/Friend and Job Costs Concerns