Builder contract procedure

Discussion in 'Landscape Architecture and Design' started by 5.0, Mar 5, 2008.

  1. 5.0

    5.0 LawnSite Member
    Posts: 120

    Question for you guys that are on with builders. I've been approached by one to install irrigation systems for his new construction. An electrician friend of mine told me that the standard procedure is for me to float the costs and then bill him at the end. I'm ok with that, but do we draw up a contract in the beginning like we do for residential jobs?
     
  2. barefootlawnsandlandscape

    barefootlawnsandlandscape LawnSite Senior Member
    Posts: 296

    Yes, you are a contractor so work under contracts. More than likely he will make you sign a lein waiver once you get paid, but make it clear to him that a lein will be placed on his property if he does not pay you.
     
  3. Sunscaper

    Sunscaper LawnSite Senior Member
    Posts: 306

    Most builders are not the most desirable customers due to a few reasons.

    1. Cheap
    2. Slow paying
    3. Want alot of paperwork due to their exessive audits.

    Be sure you know what they need in order to cut you a check BEFORE you start work. I.E. W-9, Liability insurance with them possibly listed as a certificate holder. Workers comp papers. These are the big 3 here. Trust me you want this in order before starting otherwise who knows how long it will be for you to get these papers. And the builder will not pay you until they are in order otherwise they get a large penalty.

    Leins vary from state to state. Check your lein laws. You may be able to lein before starting work and release after final payment is rendered. you may need to send notices to 3 entities.

    1. The property owner.
    2. Bank financing the project
    3. Builder

    Inform the builder of your intentions so he doesn't look like an idiot in front of his customer when they receive the notice.

    Most importantly remember that most construction loans work off of 3 major draws after certain aspects of construction are done. you, being a landscaper will be at the end of the project where funds are always tight and payments are slow as mud. If the house doesn't get passed for final inspection because the road way not swept or some other silly reason there is another week for the builder and you to get $ from the bank. these weeks can add up quick. Make sure you can extent the builder at least 30 days without payment and still survive.

    Other than that I can only say keep your builder customers to a minumum say 20% of your sales per annum. They are busy one minute and dead for hours. I have had good luck with builders but cannot count how many guys haven't. Residential is the only thing close to being steady in this business. Good luck
     
  4. 5.0

    5.0 LawnSite Member
    Posts: 120

    Thanks for the replies
     
  5. AGLA

    AGLA LawnSite Bronze Member
    Posts: 1,749

    Some builders basically use their subs to finance their projects. You would not do that for a nice honest hard working homeowner, but so many guys seem to get sucked into doing it for a builder. Why? Because you get more caught up in the dream of all the money you'll make on the next project or the steady flow of work from the builder.

    Here is my best analogy, bear with me. The contractor is basically the rich popular guy at the school dance with the fancy clothes and his dad's corvette. We'll call him Biff. He's gone through (can I use that term?) several girl friends over the last six months. Suzy is a nice girl that really wants a nice boy friend who has plenty of money and has always got something great going on. It's 11 o'clock and Biff comes on to Suzy. "Things will will be different this time, baby. You know I love you".... Do you think Suzy is going to be living in the mansion a few years down the road?
     

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