What Should You Request From a Contractor Before Making a Payment?

It is never really a good idea to make a payment to your contractor upfront, and there is a specific reason for it. Suppose you hand over the complete payment to them; what leverage will you be left with if the contractor fails to perform well or even begin with the job in the first place?

You should find a contractor willing to accept a minimum payment at the contract period, followed by periodic payments throughout the process. The final payment should only be made after you are thoroughly and 100% satisfied with the work. 

As a result, you should ask for specific questions and proofs from a contractor before making the payment. In this guide, we inform you of all the necessary questions and things you should request from your contractor beforehand to minimize the chances of any conflicts or being scammed. 

Important Questions to Ask Your Contractor before Making the Payment

We assure you, you will come across many contractors asking for a full or even half payment upfront. Note that in most circumstances, they are scammers. A contractor really should not require so much money directly, even when they administer a sustainable business. 

Here are a few things you should request and essential questions you should have answers to before proceeding with the payments.

1. Did You Do the Job Right?

Try to ensure that your contract gives you the authority to conduct a final inspection of the place before releasing the payment. You can either check the work yourself or hire a specialized inspector to do the job. 

Just make sure to compare if the job is done precisely as per the terms of the contract. Ensuring everything is up to your expectations and standards is one of the most essential things to consult with contractors before making the payment.

2. Did You Pay The Vendors And Subcontractors?

If your general contractor worked with subcontractors, you need to ensure they have also been paid. If anything has been unpaid for and you make the complete payment to the general contractor, there are chances of ending up with a mechanic’s lien on your home. 

You should always request the vendors and subcontractors for written proof of final payment before releasing the general contractor’s complete payment to prevent a lien. 

3. Does The Final Amount Match The Agreed Price?

You should always ensure that the final payment amount matches the price agreed upon on the contract. Whenever your contractor requests you for a higher payment than the one you agreed to pay, you must question it. 

Does the agreement give the contractor the ability to increase the expenses? Was the increase approved by you? You must ask such questions to avoid having to pay an additional amount that is unexpected and unaffordable.

4. Do You Have Proof of Warranties?

You should consider the warranties that were promised during the contract signing process. Is there proof of warranties in written form? Always request the contractor to give them to you in hand and review them thoroughly before releasing the final payment. 

Make sure that the warranties agree with what the contractor had promised you. In case of any uncertainties, you should avoid giving the contractor the payment until things have cleared out.

5. Did You Clean up the Area?

You must ensure that you are delighted with the project’s outcome, plus the cleanup. Did the contractors clean up after the project and get rid of the unused tools and materials? Did they restore everything and keep everything where they belong? The project site should appear completely renovated without even a sign that anybody ever stepped in there.

➔ READ MORE: An Overview of a Simple Independent Contractor Agreement.

Understand Your Payment Options

You need to decide and know what your payment options are. This way, you and the contractor can mutually agree upon the contract’s payment schedules and determine how the payments will proceed.

Do not make the payment to your contractor in cash.

When hiring contractors for smaller projects, it is always feasible to pay them via a check or credit card. The majority of people arrange cash financing for more significant projects. 

Try to cut down your down payment.

A contractor will usually always secure his job by asking for a down payment. The down payment should not exceed 10-20% of the entire job’s cost. As an owner, you should try to cut down on the down payment and never exceed over 10-20% before they have begun the work.

Payments should be tied to the defined schedules. 

If the project is not being pursued as per the defined schedule, the contractor’s payments will also be delayed. 

Mention the contractor payment details and schedules in a written contract. 

Besides all the relevant details, the contract should explicitly include information on the project’s overall cost and the payment agendas for the contractor, suppliers, and subcontractors.

When Should You Make the Final Payment to the Contractor?

It is important to interview your contractor before hiring them. There is a list of things you can request them to provide you with, including insights of their company history, references, visitation rights to any of their previous projects, etc. 

Even when you have checked these things and have verified the contractor’s authenticity, you should never make the full payment before project completion. Only make the final payment to the contractor when you are 100% satisfied. 

Make a checklist and ensure to tick each box before you release the full and final settlement. There is no room for negotiations after the payment unless you have a warranty or find out they have violated the contract.

So, always hold on to the significant part of the payment until the project’s end and pay when you are entirely sure that the work was done right.