When renovating an old house, you'll likely encounter a few contractors who want to charge based on "time and materials." This happens when they have a difficult time estimating the fee and want to charge you for their time and materials costs. Here's how to manage such a relationship.
Explaining "Time and Materials"
The first time you hear this phrase, you may be confused. How does this work and how can you budget for it?
This type of situation arises more often in old houses because there often are surprises that the contractor cannot foresee. Perhaps you are removing old knob and tube wiring and adding new wiring. While the contractor can estimate a cost, he never knows what surprises will be in the walls. In this scenario, many contractors like to charge for their actual time and the materials they use, so that they are fairly compensated.
Trusting Your Contractor
The important part of this type of situation is trust. You don't want to agree to pay a contractor for "time and materials" unless you trust that he or she is honest and will keep you apprised of the ongoing tally of fees.
Assuming you know and trust the contractor, then the next step is to define what "time and materials" means. It is safest to start with an estimate and then ask for updates as the project goes along. The contractor should keep you apprised of any major surprises that will impact the cost.
You also want to make sure that the contractor and any subcontractors are working whenever they are "on the clock." The biggest concern with an hourly fee structure is the potential for workers to be unproductive. Spell out your expectations up front and spend some time around the job site to monitor the activity. If everyone works together, this type of arrangement can be fair to both sides.
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