How much to hold back from builder until extension is complete?

[landlord]

Just wondering how stage payments work with regard to a 2 bedroom, 2 floor extension?

Also how much should you hold back from the builder until the job is complete. My father was telling me that you should hold back a percentage for 6 months to a year in case there are any major snags....is this normal?

The builder has certificates on his website showing that he is a member of, the Guild of master Craftsmen, the National Irish safety organisation and the members of the Construction Industry federation...if this makes a difference?

 

[sydthebeat]

Have you entered a contract? This 'defects liability period', and amount, should be agreed in this contract....

 

[landlord]

Have you entered a contract? This 'defects liability period', and amount, should be agreed in this contract....

Sorry I didnt really understand that...
I do have a contract, but have not signed it yet. I cant find anything specific in it on this subject (too much legal jargon). What I am looking for is what have other people agreed with builders regarding stage payments and holding money back till completion (or some time after completion).

 

[daddycool]

My contract has a 5% hold for 12 months (full house build)
Good safety net to make sure they come back and fix anything that takes a while to show up!

 

[JoeB]

You can make up a schedule.. and ask him to go for it..

i.e 20% to 40% up front depending on materials costs when compared to total cost..

10% to 20% on first day (if work was carried out off site before first day, i.e cabinet making... doesn't apply in your case but does in my trade which is bespoke kitchens and furniture etc)

maybe a weekly payment if work will take 3 weeks or longer... paid as long as work is progressing, most likely in your case

at least 30% to 40% held back until final day and work is completed to your satisfaction, or to specification...

possibly 5% to 20% held back after completion for reasonable period if a settling in period is required... not for all jobs but any jobs where flaws may not show up for a period after completion... i.e guttering, money could be held back until serious rainfall... driveway, money may be held back for 5/6 weeks to check for settling or cracks or something.

Only holding 5% back for an entire house build, i.e 5,000 on a 100,000 build may not be enough.. if a serious problem like cracked walls show up 5,000 isn't enough if remedial action would cost 30,000. Having said that I have no idea what is considered normal or reasonable... you may not get a builder if you insist on holding back 15% for 6 months, it may represent a lot of the profit and if you ever refused to pay it he may have been working for free...

The point is every job is different and it's up to your negotiating skills.

 

[ljsd]

We held back 5% of each of the payments we made to the builder. The agreement was that he would be payed half of what was retained on practical completion, issue of architects cert, completion of snags and the remaining half in 12 months. This was the advise we got at the time and the builder didn't quible over it. I think its normal to retain 5-7%. He has come back to fix any minor problems that have arisen to date but we havent completed a snag list yet.