Wednesday, August 01, 2007

The Endless Punch List

In Massachusetts, a homeowner does not have to make the final payment until the work is done to "the mutual satisfaction of the parties." What is a contractor supposed to do when the homeowner is never quite satisfied, or the punch list of items to be completed never seems to end?

I have seen this situation occur with my contractor clients, where homeowners take advantage or have unrealistic expectations about when a project is complete. How can contractors avoid this problem?

1. Start with a a good contract that spells out the work to be done and the materials to be used, IN DETAIL!

2. Make sure that all change orders are in writing, and adjust the completion date accordingly. Make sure both the contractor and the homeowner signs off on all change orders.

3. Designate in the contract who the decision makers are and make sure they sign the contract and all of the change orders.

4. When the job is complete, have the homeowner create a punch list and discuss each item in detail. Agree in advance what "complete" means.

5. Plan in advance for potential delays by suppliers or for possible mistakes when ordering materials and agree what the consequence will be for these delays.

6. Once the punch list has been created over a reasonable period of time (a contractor should assume that a homeowner is not going to notice everything immediately), say over a ten day period, then the contractor should agree to come back and finish the work by a certain date.

7. Once the work is finished, it would be worthwhile to have the homeowner sign off on the job and agree that the work has been done to his satisfaction.

8. Once final payment has been made, the contractor may want to "sweeten" the deal by signing something saying that all subs have been paid or by supplying lien waivers from the subs.

9. As always, keep the lines of communication open so there are no nasty surprises at the end of the job.

10. Make sure the homeowner knows which warranties are provided and how long they will last. I know one contractor who warranties his workmanship forever.

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