Suggested payment schedule?

Does anyone have a suggestion for a payment schedule that is fair to both the owner and the builder?

The last time I built a pool, to the best of my recollection, there were 8 or so payments at various stages, with the final 10% on "day of plaster." (I can't find my file.) The schedule itself seemed fair, but the contractor was constantly insisting on payment before he was entitled to it. We also got into a huge fight about the final payment - he insisted on payment even though the plaster job was unacceptable, and there were several other things that just weren't finished. We offered to pay some, but not all, pending resolution of the problems, and he ended up suing us rather than just coming back and fixing things. So I'm a little gun-shy.

Now we're building a pool in a different area in connection with a new house. After bids, we selected the most professional contractor, and I asked to see the form of contract they'd want us to sign. It contains the following, which makes me choke:

10% down
36% "on day of excavation"
49.5% "at gunite"
4.5% "prior to plaster"

This schedule keeps the builder way ahead of the owner, with absolutely no leverage to fix problems. If they insist on it, it will probably be a deal-breaker.

On the internet, I found the following suggestion as a "typical" payment schedule:

Maximum $1000 down.
30% after excavation.
30% after gunite.
30% after decking.
10% before plaster.

We have no decking in our job - so I'd probably substitute coping for decking here. Even then, I have two problems with this schedule. First, it still leaves only 10% on the table, which doesn't seem like enough. Second, if the plaster job stinks, there's no final retention, so we're stuck in lawsuit world again.

I'd really appreciate any suggestions.

I would never accept either of those, as you have paid 100% before the job is done. That is actually illegal where I live. By law you are not allowed to make a final payment to any contractor until the final inspection by the town is completed.

The last job I had done - a large addition on the house -- in addition to payment schedules I insisted on penalty clauses based on completion times. For each day the contractor missed his completion date by he had to pay me $100 a day. This is typical for commercial business but not as common amoung home owners. This is the way to really protect yourself.

I did something along the lines of:
5% Down
45% after steel, gunite, and rough plumbing
30% after plumbing, tile, and coping
15% after plaster
5% reserved until all punch list items were resolved (which has not yet happened and I don't think it's gonna.)

We just signed a contract yesterday with the following schedule.

60% after gunite is complete
35% after tile, coping decking complete
5% when we swim.

Ours was:

30% after excavation and forming
30% after gunite
30% after tile and coping
10% when we swim

Thanks for all the helpful suggestions, folks. Since I'm building in the pool at the same time as a new house, and am financing the whole she-bang with a construction loan, I realized I need to build in time for draw requests and inspections. So after reviewing these responses (and those received on another forum) I've gone back to him proposing the following.

$1000 at time of contract.
30% of balance within 10 days after completion of excavation.
25% of balance within 10 days after completion of installation of steel, plumbing and gunite.
20% of balance within 10 days after completion of installation of tile, coping and parging of exposed exterior of bond beam.
15% of balance within 10 days after completion of plaster.
Final 10% of balance within 10 days after satisfactory completion of all punch-list items and receipt of satisfactory evidence of release or waiver of all liens, including by all subcontractors and suppliers.

He's uncharacteristically silent, so we'll see if he moves at all. I do have another confidence-inspiring builder whose bid was very similar, so I do have options.

Hi,

Just for comparison, my pool builder had us pay as follows:

No money up front
35% after gunite
30% after pumbing
25% after decking
10% after water was circulating and we are swimming.


Michelle:)

Mine was a IG vinyl pool (18x36), w/ tons of extras. Brick coping/edging at ALL corners had to be redone, which set us back 4 weeks.

Schedule was as follows:
5% at signing contract
55% when hole dug (on a Tuesday)
30% when liner in and water in pool (by Friday)
10% upon completion: coping, deck, ladders, diving board, water level maintained and filter running......basically able to swim.
*****originally had stated only that completion was 'filled w/ water and filter running' which means cleared by inspector. We said no to that, as brick redo and then cement decking was delayed. Builder was fine w/ this change in original contract.

Good luck.

CaryB

Having been burned by a kitchen contractor when the final payment was 5% (he forfeited it to avoid finishing and I had to do all the final work myself), I'd never settle for less than "10% upon passing inspection" again, and try to get 25% if I could.

I'm even willing to escrow the money (with MY attorney) so that he knows it's there and I can't stiff him, but if he doesn't meet specified conditions, it doesn't get released.