Incomplete installation and withholding payment

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cksiam
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Incomplete installation and withholding payment

#1 Post by cksiam » Wed Aug 28, 2013 11:22 pm

Curious to see what others believe would be an appropriate way to deal with a contractor problem.

I'm wrapping up the last seven windows in my house, about $7K. Mostly triple pane, woodgrain laminate, full tear out with matching laminate trim. I'm using the same contractor for the third time. The first time I put 25% down and paid the balance upon completion. The second time, no deposit. This time no deposit and the order was done via email messages and my email confirmation. Now, here's the problem....

After the first day of work, I noticed every window had dings and scratches in the laminate on the sashes, some exposing the vinyl underneath. They were small but noticeable and the touch up paint they used looks awful. Those dings and scratches are unlikely to occur after install and instead had to be caused during shipping or install. I told the company this was unacceptable and the installer said he'd order 6 new sashes and swap them when they arrive. The trim on two windows have been left incomplete because of defects and scratches in the frames which have to be reordered.

The next day the owner of the company who is also the main sales rep called to make sure I was okay with what they were planning to do to fix things and then asked for me to pay him $6k of the $7k. He said he needs to cover his costs and pay his distributer. The last $900 I could pay him on completion.

I refused and said I'd pay him in full once complete. I said I was shocked he would ask for so much with every windows having problems. Had he asked for less than 50% I would not have seen that as unreasonable. But because he asked for 85% of the project, I'm now suspicious of his intentions.

So, am I being fair in refusing to pay him anything until I know things are fixed and complete?

toddinmn
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Re: Incomplete installation and withholding payment

#2 Post by toddinmn » Thu Aug 29, 2013 12:38 am

Were you OK with the proposed fix? If so then the payment request does not sound unreasonable, but I would hold back more since it would cost you more the $900 to fix it.I'm sure he'd be willing to take what you are comfortable with.

cksiam
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Re: Incomplete installation and withholding payment

#3 Post by cksiam » Thu Aug 29, 2013 1:17 am

Yes, I was perfectly okay with the fix, but was shocked when he asked for so much given the issues. That really threw me off.

randy
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Re: Incomplete installation and withholding payment

#4 Post by randy » Thu Aug 29, 2013 7:53 am

Communicating your concern to him, and having a reasonable attitude should allow the two of you to come to an amount that you can both live with. I would think that holding back $2000.00 would ensure you get the needed corrections.

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Re: Incomplete installation and withholding payment

#5 Post by masterext » Thu Aug 29, 2013 8:44 am

I would pay him something.. He really should have made certain he received a deposit.
He obviously trusted you so i think its only fair and logical to give him partial payment to pay his end.

cksiam
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Re: Incomplete installation and withholding payment

#6 Post by cksiam » Thu Aug 29, 2013 10:10 am

I agree. But the most I think I should pay is 50% and pay the other half when complete. If he would have asked for that, I wouldn't have been surprised. But asking for 85% seemed far from reasonable and made me question his motives. Thanks for the advice.

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HomeSealed
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Re: Incomplete installation and withholding payment

#7 Post by HomeSealed » Thu Aug 29, 2013 10:19 am

Good advice above.

Depending on the wording of the contract, in most instances final payment would be due upon substantial completion, meaning that the work is completed and ready to be used for the purpose for which it was intended, and any final inspections for permits, etc are completed and passed. Product service issues are warranty items and would not fall into that category. That being said, in most cases it is certainly reasonable to ask to withhold a small amount, and most companies/contractors are willing to do so as an act of good faith. Ultimately your contract and the manufacturer warranty are what protect you in this case, not withholding a few bucks on the final payment.

Regarding the actual amount, when I am in situations such as this communication is key, as both sides are looking to protect themselves. On your side, you want to make sure that you get everything fixed to your satisfaction, and on his end, he has to pay the bills as though the job is completed and paid in full. To me, a reasonable amount is whatever the value of the parts are. For 6 replacement sashes, and a couple frames (and the installation to go with them), I'd say $1000-$1500 is reasonable. The fact that are using this contractor for the 3rd time tells me that he seems trustworthy, and I'll reiterate the fact that your contract and warranty are what protect you and insure that these issues will be corrected... Think about if you just purchased a car, and on the way home, you have a problem with it. You need to take it back in to fixed under warranty, you don't get to withhold any payment until the parts are fixed.

One final disclaimer: My advice above assumes that you are dealing with an established, reputable company. If this is a very small contractor that could be here today and gone tomorrow, then you certainly have to take that into account as well. That is why it is so important to choose a reputable company that you can trust. :D

cksiam
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Re: Incomplete installation and withholding payment

#8 Post by cksiam » Thu Aug 29, 2013 10:39 am

They are a small company more than 20 years old. They are a Sunrise Restorations dealer. We don't have a contract with payment details, only an order form. We didn't have problems the first time.

As for the car example, I wouldn't expect rust or dings before even taking possession of a new car.

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Re: Incomplete installation and withholding payment

#9 Post by HomeSealed » Thu Aug 29, 2013 11:44 am

cksiam wrote:They are a small company more than 20 years old. They are a Sunrise Restorations dealer. We don't have a contract with payment details, only an order form. We didn't have problems the first time.

As for the car example, I wouldn't expect rust or dings before even taking possession of a new car.
Rust or dings generally aren't covered by a warranty though either....
If you do not have a contract spelling all of this out, that certainly makes things a little bit more dicey. I would encourage you to work this out with the contractor. Hopefully both parties can be reasonable and open minded, and you guys can come to a mutually agreeable solution. Personally I'd say that 50% would not be sufficient as many companies take 50% down upon placing the order, but again, I would just continue to work with him in good faith. What I would recommend in the future is to deal with a company that has a solid contract with great detail, as it protects both sides. My advice above was contingent upon that, so you obviously have to take that into account as well.

cksiam
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Re: Incomplete installation and withholding payment

#10 Post by cksiam » Thu Aug 29, 2013 12:49 pm

I spoke with the contractor and he said any amount I was comfortable with, he'd appreciate. I said I'd give him 40% and he was fine with that.

They should have inspected the windows first, shouldn't they? Oh well, I think in the end the contractor will take care of us and well be happy.

This information was helpful. Thanks.

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Re: Incomplete installation and withholding payment

#11 Post by HomeSealed » Thu Aug 29, 2013 1:54 pm

As long as you mutually agreed upon that, it sounds like a fair deal, particularly given the lack of a proper contract.
Regarding inspecting the windows first: yes and no. The windows are generally not unwrapped until the get to the job site to protect them during transport. At that time, the question is: would you rather just get the windows installed now and have the parts serviced considering that everyone is on site, ready to go, and you may or may not have taken off work? Or would you prefer to postpone the entire project until all of the new, defect-free parts are in? Either way is fine, but most folks prefer the former in that situation (both installers and homeowners).
Good to hear that everything is copasetic. Please post back after the replacement parts are installed with your final thoughts. :)

cksiam
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Re: Incomplete installation and withholding payment

#12 Post by cksiam » Thu Aug 29, 2013 2:12 pm

Will do.

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Re: Incomplete installation and withholding payment

#13 Post by TheWindowNerd » Mon Sep 02, 2013 6:22 am

Glad to see that your contractor is doing the right and smart thing.
Let me on the soap box please. I try to be the safest contractor to be dealt with. Let me explain, in most states the consumer protection agencies biggest complaint area is contractors. Poor workmanship and bad business practices being the lead. In most cases I do $1 deposit (no pennies please) and balance upon completion( not substantial completion). If there is a product problem or install mistake customers do not have to worry if I am motivated to get it done, I am. Many will say that we are ordering custom product and what if the homeowner backs out, that is why I need a 50% deposit. I would say that 1. you have terms with your supplier( if not that is a warning not to do business with them,2. homeowners are not the problem, though I have been stuck by a few contractors, 3.change your sales process to make sure you client has made a right choice.
We are not perfect and when a mistake or project can not be completed as scheduled will wait till complete for payment. Most of my customers at that point will offer to pay an amount they think is reasonable, sometimes I let them.

cksiam
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Re: Incomplete installation and withholding payment

#14 Post by cksiam » Mon Sep 02, 2013 9:59 pm

That was exactly my concern, Anthony. I wanted to make sure my contractor had an incentive to finish the job in a timely manner and fix my concerns. The amount he had asked for seemed to be enough to walk away from the job. I feel better knowing that the money I still haven't paid him is worth way more than the cost and time it will take him to wrap things up.

But perhaps he really didn't think anything of asking so much before the job was complete because he trusted that he would take care of all my concerns. But how would I know that for sure? In any case, he apologized for the inconvenience and asked if there was anything else I wanted addressed and brought over a written contract show the balance to be paid when the project is complete. He never tried to convince me that I was being unreasonable for asking for the sashes to be swapped out (although he might have thought it).

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Re: Incomplete installation and withholding payment

#15 Post by fridge2020 » Tue Sep 03, 2013 9:42 am

Maybe in Mayberry people still conduct business based on handshakes, and nobody takes money down. I don't see that as a viable option for anything other than a very small operation where the owner handles EVERYTHING. For most companies, professionalism is a must, including contract terms and the accompanying "skin in the game" by all parties. Not taking a down payment only furthers the "unprofessional" perception that contractors have, which is sometimes justified but many times not. If it works for some, great, but I have to take issue with the insinuation that a down payment is somehow inappropriate. The vast majority of well established companies that have been in business for years, have a physical location, trade certifications, etc will require a substantial down payment.
Cksiam, it sounds like you have things worked out well with your contractor. That is good, as these things can get ugly on occasion, particularly when things are not spelled out in detail on a legal document.

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