Home Designer wants full payment before completion

[Ad13]

Hey guys, im hoping that those of you who have gone through the process of building a house can help with this situation.

We are in the beginning stages of building a new home and long story short: The designer want 100% of our agreed payment before the plan is finalized. The floorplan is completed but the truss layout, blueprinting (through third party) and city apprroval is not yet completed.

Most construction projects Ive been involved with are paid partially upfront and partially after completion or as milestones are completed such as contracting but the designer insists this is not the case. We were hoping to pay the remaining 25% after the city had approved the design because if they dont, the designer has no motivation to fix the design since he is not contractually obligated.

Thoughts?

 

[Angelfire]

Nope. Pay on the basis of percentage complete.

 

[MFolks]

So, what's to prevent Him(or Her), to take your money & say "Bye"? Or close shop & move away?

 

[Leaflessshadetree]

Hey guys, im hoping that those of you who have gone through the process of building a house can help with this situation.

We are in the beginning stages of building a new home and long story short: The designer want 100% of our agreed payment before the plan is finalized. The floorplan is completed but the truss layout, blueprinting (through third party) and city apprroval is not yet completed.

Most construction projects Ive been involved with are paid partially upfront and partially after completion or as milestones are completed such as contracting but the designer insists this is not the case. We were hoping to pay the remaining 25% after the city had approved the design because if they dont, the designer has no motivation to fix the design since he is not contractually obligated.

Thoughts?

Tell him no.
Tell him why.
Tell him he is just a vendor, that you don't care about his circumstance or degree and that there are 17 more of him in the yellow pages.

 

[laser3kw]

want 100% of our agreed payment before the plan is finalized. The floorplan is completed but the truss layout, blueprinting (through third party) and city apprroval is not yet completed.

you pay, city rejects. then what? you pay more... rinse and repeat

balance upon full / all applicable approvals / permits or whatever.

 

[bczygan]

I get my agreed upon design fees in full up front, period.

And the scope of the work I will do is also very carefully defined.

Now, if I was on the other side of the table........But I'm not!

 

[Stuart in MN]

I don't work in residential, but in commercial/municipal construction there are no 100% up front payments. I wish there were, I just spent half the morning nagging clients about past due invoices.

 

[larry4406]

Commercial architectural projects have schematic design (SD), design documents (DD), and construction documents (CD). The CD's are the permit set.

The AIA contracts I managed had progess payments to the architect as each milestone was reached. Final payment (5-10%) was paid upon issuance of permits and satisfactory resolution of all permit review comments.

On the residential projects I run, truss supplier provides their stamped drawings as does the floor joist vendor. The drawings for the roof and floors trump the architect plans.

 

[Voi]

We are in the beginning stages of building a new home and long story short: The designer want 100% of our agreed payment before the plan is finalized. The floorplan is completed but the truss layout, blueprinting (through third party) and city apprroval is not yet completed.

A friend of mine is getting ready to build a custom home and he's inquired with a couple of draftsmen. I think he said both require a partial upfront fee but then after that one bills by the hour and the other bills by the square foot. I'm sure I'll hear from him later today. I'll try to remember and ask.

 

[buddyboy]

this is something you'll need to sit down and discuss with him.

express your concerns and hopefully he'll address those concerns.

obviously at this point his only concern is finishing what he thinks he agreed to do and to get paid.

you need to reassure him that he'll get paid

he needs to reassure you that you'll get the plans you hoped for

right now it's a Mexican standoff, with both sides covering their own asses

 

[58Yeoman]

So, what's to prevent Him(or Her), to take your money & say "Bye"? Or close shop & move away?

Yes! On a smaller scale, when I moved to this area, I needed a Chiropractor. After a couple visits, the first one told me that I needed to pay $2200 up front to continue with treatments. I refused, and went to number 2 (of 3 available).

A month or so later, she disappeared in the night. I wonder how many clients paid in advance? Now, I go to #3, which is the best anyway.

 

[DekeT]

Hey guys, im hoping that those of you who have gone through the process of building a house can help with this situation.

We are in the beginning stages of building a new home and long story short: The designer want 100% of our agreed payment before the plan is finalized. The floorplan is completed but the truss layout, blueprinting (through third party) and city apprroval is not yet completed.

Most construction projects Ive been involved with are paid partially upfront and partially after completion or as milestones are completed such as contracting but the designer insists this is not the case. We were hoping to pay the remaining 25% after the city had approved the design because if they dont, the designer has no motivation to fix the design since he is not contractually obligated.

Thoughts?

Likely the truss layout is being subcontracted out by the "designer".

 

[AndyCBR]

Hey guys, im hoping that those of you who have gone through the process of building a house can help with this situation.

We are in the beginning stages of building a new home and long story short: The designer want 100% of our agreed payment before the plan is finalized. The floorplan is completed but the truss layout, blueprinting (through third party) and city apprroval is not yet completed.

Most construction projects Ive been involved with are paid partially upfront and partially after completion or as milestones are completed such as contracting but the designer insists this is not the case. We were hoping to pay the remaining 25% after the city had approved the design because if they dont, the designer has no motivation to fix the design since he is not contractually obligated.

Thoughts?

Most commercial plans are done on a payment schedule at certain milestones. But the majority of the design fees are paid prior to construction beginning. A smaller portion of the design fees are billed throughout the project until completion to handle changes and RFI's, etc.

In residential I would think it varies more and more fees are paid upfront.

In the designers defense they have probably been stiffed by other parties in the past.

I think a more fair arrangement would be a final payment at the time full permit plans are delivered with maybe a small retainer held back to fix any permit issues. Or, at lest a written agreement any permit issues that pop up will be handled as part of the design fees that have already been paid.

I would discuss your concerns with the designer and see what he thinks. You also have the option to take your floor plan anywhere else and start over with another designer. It will likely cost you time and possibly more money though.

Good luck and let us know how it turns out.

 

[woodzy]

Can I assume you will not have a mortgage on this new house? If that is the case, you will see this again and again with future contractors. I think building a house it is in everyone's best interest to have a Bank handle these money transactions. Once the builder asks for a draw, the bank sends out the appraiser and then they are paid with your OK. Not until you and the appraiser and bank agree, no payment is issued.

If I was building a house and did not have a mortgage, I still would have a mortgage and once it was complete, I would just pay it off - the little cost in interest in today's work is almost zero. With using the bank - you have some bigger teeth if issues arise.

My 2 cents worth.

Good luck.

 

[nick2010tundra]

I would be calling some truss companies, usually the designers truss's won't be what they want and they redo it. They will be the ones that have the engineer to sign off on it anyways. I ran into the same problem , the architect ripped me off on a plan I had and wanted slightly changed. When I went to the truss company they asked why he even bothered with the trusses, they always do them. Usually the designer does them just so he can charge more. Also the designer won't know whats cheaper or bettercompared to the truss company. I still remember the engineer at the truss company telling me that after seeing my plan, the mods I required and what I was gonna be spending in trusses he would have done the whole thing for free if I bought the trusses. Worst 2500 bucks ever spent, the plans sucked, had huge errors and measurements were off from page to page

 

[tommyp]

My architect is paid buy the hour when milestones are reached. Helps that I have known her my whole life. I don't think I would pay in full on a custom job where there will be a lot of changes etc.

 

[Jackfre]

I don't work in residential, but in commercial/municipal construction there are no 100% up front payments. I wish there were, I just spent half the morning nagging clients about past due invoices.

Which is what got me out of the contracting business 30 yrs ago. I didn't have a relationship with Guido and Vito, the Wishbone Brothers and had to do my own collecting. I remember the guy who said, emphatically and with cause, "You're crazy!" To which I responded "yeah, and it is people like you that make me that way!"

To the OP. I think, as previously noted, that you have to have a sit down with this person and go through step by step your expectation of what "complete" is and get an understanding of how his work will flow and exactly what is included. Then you can lay-out the payment schedule in an agreed manner. I'd make a point of saying that as things are finished and delivered/approved that a check will be forthcoming immediately. I would not pay it all up front. Someone who plays that way gives me the willies.

I would take this experience and use it with each sub or vendor you deal with. Understand the scope of the work. Let the sub/vendor explain their thoughts on the matter and see if they fit yours. Agree on a payment schedule and a time frame. Also, keep close communication records. It is always useful when someone says you didn't do this, then and they try to use it as an excuse and you can say "on this date and at this time I...."

Good luck on your project!

 

[rslaback]

As a guy who had a set of plans that I designed stolen from me and built by another guy I can see his concern.

 

[LXCam]

All though I'm in complete agreement that final payment isn't made until you're permits have been issued (simply put). If he really wants to be a jerk about it and you are dead certain you want to use this individual, then place the final payment in a escrow account. Yes it will cost you a little bit of money, but he should have no concerns that his payment is secured and once you release the funds he is paid in full. If this is a unacceptable proposition to him, then he either isn't very good and is concerned about getting through plan check or intended to burn you directly or in-directly with additional fee's during the plan check portion from the beginning.

 

[bczygan]

If your guy is a designer working out of his house, doing residential only, as I do, then I can see him asking for all up front.

My jobs were done for less than half of market, so the amounts were in the hundreds to under 2K. If the owner couldn't come up with that, then he couldn't afford to build, in my book.

And I was a professional, with ethics that wouldn't allow me to do less then the best work possible, complete in every way.

If there wasn't enough trust between us to support this, then we didn't have a good enough relationship to proceed anyway.

All work was done on a handshake. Never a written contract.

Bill

 

[Ad13]

There are some very good points here, thank you guys for sharing your experiences. I will be sitting down with the designer this evening. Financially and time-wise, we are too far along to change designers.

It is unfortunate that he is not as professional as I would have liked. He is constantly making corny jokes over emails and making excuses about his wife's disability when he asks for payment. Saying things like "The pharmacy is loving my wife and I after the car accident" etc.

This is what he said over email:

"In over twenty years I have got paid once my part is completed. Never have I had someone required this [not paying 100% before approval]. Any architect works the same way. Once I am done the working drawings I hand the drawings over to you, you can do what you want with them. Payment in full when the product is transferred to the owner. Expect to see someone today."

@bczygan The designer is residential only and works out of his house, but this is not a $2K job. It is a large project which we want to be completed without shortcuts.

If he does not acknowledge where we are coming from, I may write a simple contract to have some reassurance. 75% of the fees are paid already, with the last 40% paid out on May 7th.

 

[roscoe2000]

I would not make any more payments till you have stamped drawings and permits approved.

 

[Trey T]

If your guy is a designer working out of his house, doing residential only, as I do, then I can see him asking for all up front.

My jobs were done for less than half of market, so the amounts were in the hundreds to under 2K. If the owner couldn't come up with that, then he couldn't afford to build, in my book.

And I was a professional, with ethics that wouldn't allow me to do less then the best work possible, complete in every way.

If there wasn't enough trust between us to support this, then we didn't have a good enough relationship to proceed anyway.

All work was done on a handshake. Never a written contract.

Bill

It's not about the dollar amount, it's about the idea of making a purchase. if the contractor or designer has completed a service, partial or whole, they are allowed to received payment - PLAIN AND SIMPLE!

i.e. if am the contractor building you a shed, I should go buy all the material and transport it to your location; that task already as part of the service has been completed - I SHOULD GET PAID!

The payment has to be justified. Payment upfront is complete non-sense and I've seen this evolved in the wrong way. It's acceptable in many industries but it's non-sense.

i.e. photography service today want 100% up front but I never understood why. However, that only make sense in the film-era because there's so much involved with planning and that planning requires labor and purchasing material.

 

[raffaelli]

Designers are not architects. If youmare working with a designer be sure you are ending up with permit sets signed and sealed by a professional.

Payment terms should have been outlined in the contract. However, it is not unusual for drawings to be held back till payment in full one off projects

 

[Architorture]

Designers are not architects. If youmare working with a designer be sure you are ending up with permit sets signed and sealed by a professional.

Payment terms should have been outlined in the contract. However, it is not unusual for drawings to be held back till payment in full one off projects

Most states do not require an architect to prepare drawings for single family residential under a certain size

 

[nehog]

... The designer want 100% of our agreed payment before the plan is finalized. ...

What does your written contract say about payments?