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After the contract is signed, payments may be disbursed. Most contractors follow the informal rule of thirds payment plan and will expect a check
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Ten or cash for the first third of the amount estimated for the job before work begins. The next third will be due when the job has begun and is partially completed, and the last third will be due when the job is complete. If you have not worked with your contractor previously, you should attempt to pay a low down payment until the contractor has begun work. You should not pay the second or final third if the work is behind schedule. Payment should be made for phases completed, and not time intervals. Payments should not be made for incomplete or poor-quality work until you are satisfied with the work. All of these items should be identified clearly in the contract. Most firms of significant size and expertise will not ask you for any money until the job is complete. These firms are confident in the materials they use and the workmanship they employ. Finally, your contractor may want to be compensated for his or her time during the interview process, particularly if you have an extensive remodel and your contractor spends days helping you develop a plan. This is an acceptable payment. Never provide the final payment or release until you are satisfied with the work completed. Verify that all subcontractors have been paid. If the subcontractors or supplies are not paid by the contractor, you may be liable. You can completely avoid this problem with proper planning. As a client, you can require a Release-of-Lien clause to the contract. Payments to the subcontractors can be placed in escrow and not disbursed until work is completed to your satisfaction and to the satisfaction of your general contractor. Warranties of materials or workmanship should be in writing. Careful attention to detail will prevent any misunderstanding. Understand all terms and conditions of the warranties. Be familiar with the length of time, physical limitations, geographical locations, and your rights as the consumer of this product and/or service.
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The contractor will obtain the building permits. Proper permitting is vital; failure to get the proper permits before work begins could cause significant delays or fines for noncompliance with the building codes. Building codes are established at all levels of government (such as the insulation requirements shown in Figure 10-1). Building codes are implemented for your safety and your benefit. You may not understand or agree with the building codes in your area, but the permit process is an absolute must to ensure your safety and the safety of the building project. Plus, you can be fined without proper permits, and
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FIGURE 10-1 Insulation requirements
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http://www1.eere.energy.gov/consumer/tips/images/chart_new_construction.gif
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you can be asked to tear down any unpermitted construction. Finally, not securing building permits can cause problems when it comes time to sell your home. During the sale of your home, you will need to obtain the proper permits and possibility redo the work originally completed without the permits. Zoning and permitting laws vary considerably from one jurisdiction to another. Be sure that your contractor is familiar with the process of obtaining the appropriate permits. Your contract should state that the work performed will be in accordance with the applicable building codes in your area. Work done by subcontractors, such as electrical, heating and cooling, and plumbing, also requirs permits. Licensing and permitting are almost always approved for solar improvement projects, because most municipalities want to assist you in improving your home. Your home improvements theoretically better your neighborhood and therefore your tax base. As the work is underway, your contractor will arrange for city inspectors to sign off on the work completed. The inspector will come to your home and verify that the work performed complies with local building code. If the contractor s work does not pass inspection, you cannot be
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Ten held responsible financially for the corrections that need to be made. All issues and items should be negotiated with the contractor before work begins and this should be included in the written contract. Permits are particularly important with green renovations and solar projects. The contractor and homeowner must adhere to strict rules to obtain tax exemptions, rebates, and credits. Failure to follow correct procedures will result in the forfeiture of all of these incentives. For most PV systems, this would mean a loss of tens of thousands of dollars. In most building codes, a solar project is considered a home improvement, and although it will cause your local government to raise your property tax, most governments can provide a tax waiver. Local governments will allow individuals to make changes that are beneficial for the individual and community without incurring additional taxes. Confirm this with your installer or contractor.
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