Without Contract Keepers Solutions

Joe decides to extend his cottage by adding an additional room. He calls around until he finds someone who seems promising to do a good job. Joe agrees to have ABC Builders add an additional room to his cottage (20 x 20) for $50,000. This is Joe’s cottage and he’s not always around to make sure the work is getting done properly, but when ABC builder contacts Joe 4 months later saying the job is complete Joe examines the room for himself. Joe is in shock with how terrible the room looks. The drywall is wavy and looks very poor. Joe contacts ABC Builders to say he needs them to come back and finish the job, but ABC Builder claims they have done the job to the state minimum standard. Just because this is the stated minimum standard, doesn’t mean this is to Joe’s standard.

With Contract Keepers Solutions

If Joe were using Contract Keepers, Joe could have listed in his phase descriptions the quality of work that he wanted done by googling and listing exactly what he had wanted. The funds could have been broken up into certain milestones for the project. Joe could have had 25 different payment phases and had ABC Builders send pictures, videos, and updates when each milestone was completed. If Joe didn’t like something or something wasn’t completed to his satisfaction as what was described in the description, he wouldn’t release the money and ABC Builders would have to go back and touch up what needed to be touched up. More specifically ABC Builders could have sent him a video and a picture of what the drywall had looked like and Joe could have made his argument then and there from the comfort of his own home through Contract Keepers Solutions messaging platform.

Without Contract Keepers Solutions

John Doe is a homeowner who has been living in the same house for the past 15 years. John has been saving up over the last several years to update his very outdated kitchen. John had called his close friend Jane and asked if she had any recommendations for contractors to renovate John’s Kitchen. Jane had not personally had work done but had heard good things through word of mouth. Jane referred John to XYZ Contractors which was a local independent contractor. John listed the main things he would like renovated to the contractor. Those things consisted of new cabinets, countertops, backsplash, sink, painted walls, and flooring. John had picked everything he wanted out and was quoted at $15,000 for the job. XYZ Contractor had brought John a very confusing contract and John had signed it and was required to pay 100% of the cost upfront. The project took around 8 weeks and John realized a lot of flaws about the work that was done. The paint was the wrong color, the floors weren’t properly stained, and the countertop was never fully installed and was very loose. The overall detail and craftsman’s ship was very poor, and John was extremely upset. John had called XYZ Contractors, but no one ever would pick up or call back. John spent months trying to get the contractor to come back and touch some things up. It was about 5 months later than XYZ Contractors had come back and only tightened the countertop, but the paint was still the wrong color, and the floors were never properly stained. John had mentioned threatened to take them to court, but he had already spent all his money that he was saving up on this kitchen remodel, he couldn’t afford court fees and he truly didn’t know what he had signed with the contractor. John had saved up for years and was left with a poorly finished kitchen.

With Contract Keepers Solutions

If John Doe was using Contract Keepers his first step when meeting with XYZ Contractor should have been “I would like to use Contract Keepers” and then explained to the contractor what this service is. The first red flag would have been if the contractor says no to using Contract Keepers. This is when you find another contractor. If The contractor said “yes let’s use contract keepers” then you would proceed to creating your own custom contract. When building your contract, you could have set up payment phases that are equally beneficial for John Doe and XYZ Contractors. This would require John to do a little more research and call around a couple places to get quotes on materials like his cabinets, floors, sink, backsplash, and paint. Now when creating these payment phases, you can now create phase 1 of payment as “Materials” then after gathering all your costs you can provide the Contractor with a more accurate number. You can then proceed job by job and list phase 2 as “cabinets” and then write a description on what needs to be completed in order for payments to be released. In this description you can say “the cabinets must be (cabinet code 12345 from Cabinets Express that cost $1,000) installed tightly and secure, payment will be released when I approve”. This now sets boundaries that XYZ Contractor is held to your standard. You would then continue to do this for all other project phases total your total project cost from what XYZ quoted you on. Now you have a project “to-do” list that shows how much money will be released when each phase is complete with a description that is required in order for payments to be released. Money will be held in escrow, so neither John Doe nor XYZ Company have the funds until John Doe released them. When John Doe sends the contact after having several talks with XYZ Company, XYZ Company will review and have the option to accept or decline. If the project is declined, XYZ may write a proposal to your contract or add notes to why the contract was declined. Reasons why it might be declined would be unrealistic descriptions to release funds, or not enough money up front to pay for materials and labor costs. This might require you to go back and forth a few times until both parties are satisfied. When the contact is accepted, now John Doe can examine every job and either approve or say, “hey this needs to be fixed”. If John was using Contract Keepers, he wouldn’t have to wait last minute to say something because he wouldn’t release any payments until the phase was complete. This could have potentially saved John thousands of dollars and time.

Kitchen remodel scenario, I’m going to focus on cabinets since they’re the most expensive part of the project when it comes to materials. The homeowner, John Doe, spent about $30,000 on cabinets alone (65k – total project). The kitchen is demoed and prepped, electrical has been moved and they are installing the cabinets. The cabinets are all put in place, the countertops are measured, ordered and arrived in two weeks. With the counter tops in, they start the finishing touches and installing the doors and handles, only to find that the main doors in the center of the island now has a large crack in it. The contractor finishes the job and has to order a new door. The customer then pays the contractor since the job is 99% complete.

With the cracked door hung, a new door is ordered, but due to supply chain issues the homeowner is told it could take 6 – 9 months to get a new door. The contractor moves on to a new, more expensive job, making this one door a minor inconvenience to him since he’s been paid in full. If the homeowner would have used CKS they would not have signed off on the final phase, since the work was not 100% done to the homeowner’s satisfaction. The contractor would be forced to work overtime to get the door cut by a local Craftsman, and complete it within a week not months!

This example will discuss a bathroom restoration gone awry. Floor restoration is in a bathroom. The homeowner goes online and finds a tile contractor with 5-star ratings (only problem– there is only 3 reviews) They reach out to the contractor and the contractor writes up a contract for a floor to tie up to the walls in a bathroom. It has two draws, 1) tear out of the old tile, and 2) laying down new tile and grout. The tear out and the prep work goes perfectly without complaints. The contractor starts draw #2, laying the tile, and it’s a two-day project . Day 1 – lay down the tile, and Day 2- grouting. They put the tile down and let it set up and come back the next day for grouting. They arrive on the second day to begin grouting. Luckily for the contractor the homeowner did not want to sit around the house all day waiting for grout to set so they went to their relative’s house. They paid the contractor because the tile was already in place and all they have to do is grout. 2/3rds of the way though the grouting it became apparent that their measurements were significantly off. The owners return home with the grout in place and see all the imperfections. It is obvious to the homeowner that the contractor did not match up to the wall pattern properly.

Unfortunately, they had a 50/50 contract and 50% of the contract was due at time of grout. If they had used CKS they would have escrowed the money and only released the money when the project was completed 100% in accordance to the pre-set requirements. In addition to that if they would have signed a contract stating there would be litigation, the contractor would have been more attention to detail on the job or not taking the job (Red Flag).