I hired a contractor to work on my 2nd flip. In the 2 months that he's been there, he's only completed the roof. He's still working on the framing (which should've been a 2 or 3 day job). He knocked down a bad wall over a month ago and has left it fully exposed since. So basically, he's done less than 2 weeks worth of work in 2 months and I don't see any improvement. With that said, I need to terminate his contract.
I essentially used the same contract as the one provided when you purchase ' The Book on Flipping Houses'. For the scope of work, I listed out all of the tasks that I needed completed and the payment schedule was similar if not the same as the one outlined in the template.
10% paid after Signing the Contract
20% paid after 2 weeks of work on the project
30% paid after half of the work has been completed
30% paid near the end of the project after a substantial amount of the project has been completed
10% paid after work has been completed
He received the first 2 payments and is no where near 50% complete. I'm drafting the termination letter now and was wondering if there's anything that I should consider? The contract says that I can terminate for any reason with notice. I'm planning on handing him a Mechanic's lien form. I suppose that when I hand him the letter and take the keys, that'll be the end of that. I've reimbursed him for any material that he's purchased and since he's no where near 50% done, he's not due any more payments. I was planning on having the inspector check his work before the letter but he seems anxious to get to the electrical and plumbing work which I keep telling him to hold off on and don't want him taking it upon himself to start purchasing that material.
Did you have a time frame in the contract ? if not it could be tricky .
Only part of the task is completed and a replacement contractor is identified and contract signed. Other contractor may not want to finish up his mess.
@Matthew Paul The contract has an end date which is sometime during the end of March. I believe it was the last Monday of March. So he's 2 months into a 5 month project and is only now wrapping up the framing.
@Sam Shueh I called one of the contractors who I interviewed for this project and had them stop by. They saw what was done and said they'd be comfortable completing the job if necessary as long as an inspector came in to look at the work that was already done. They were concerned that parts of the framing wouldn't pass inspection. As far as finishing their mess, at this point, that would only be framing and picking up where they left off.
@Jason Rivera You do have the clause where you can terminate the agreement . Thats probably your saving grace . Without knowing the scope of the work I could be off on this , but the end of March is 3 months away , thats enough time to build an entire brand new house from the ground up .
Just to play the other side of things , there are times where we are starting one job and still finishing a job at another location , and splitting time between the 2 . We are making best use of our time . The contractor could be doing something similar .
@Matthew Paul The contract states that we can terminate for any reason with 7 days written notice.
Yeah, early on, he mentioned that he was wrapping up a project but he mentioned it once as a reason for not showing up one day and hasn't mentioned it since. It has felt like he's been making things up. There's always an excuse for lack of progress and he constantly tells me what he plans to work on but doesn't. For example, I'm partnering w/ my dad on this project and he went to see him on Monday. Contractor says he's going to wrap up the framing on Monday which was just closets. I then speak with him on Tuesday and ask what he's going to work on that day and he says closets. My dad goes to the house Wednesday, and they are working on closets. Today it sounds like they're still working on some framing (but the 3 closets are finally done). The house was a shell when they started so I feel like if framing has taken 2 months then there's little reason for me to believe that the rest of the project will finish in the remaining time.
Framing is the easy part , usually . Sounds like you have good reason to cut him loose , and have the right paperwork to back it up .
I did a project that I drug my feet on and took almost a year to finish . I gave all kinds of excuses . Fortunatly , my wife is forgiving and didnt kick me to the curb .
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