I am trying to get some advise on custom home builder billing.
I am concerned that there is some double billing and want to get a feel for what is normal.
This is for a custom 4800 sqft custom home, passive standards, British Columbia.
When I hired the custom home builder, we had a gentlemans agreement (no written contract) that I would pay 15% contracting fee on top of trades/materials/expenses. Budget 2+million. When asked what I would get for this 15% it was communicated that it would include their expertise, organizing and management of the sub trades, call/liase for inspections, coordinate with myself re: changes to plans and perform other project management tasks.
I am now taking over as HPO 2 years later as most important details have been completed.
I am now trying to figure out total amounts owed and come across some concerns with their billing.
The builder now states the 15% contract fee includes: the overhead and profit for the company. e.g., Trucks, tools, equipment, shop rental, office expenses, accounting, legal, insurance, employee benefit expenses including WCB, stat & sick pay etc.
They are saying that no management was including in this fee and have billed all onsite management of the trades, meeting for permits inspections, liasing with home owner and are now calling this role “Site Supervisor”. This is the same person (custom home builder company=”Site Supervisor as an employee of the home building company”)
So the builder is charging 15% on all trades, expenses, materials which over the last 30 months has accumulated to over $200k paid to him. Upon further inspection into his invoices it seems that he has been charging $60/hr for all onsite management including meeting with me to discuss details of build, manage the trades on site, liase with permitting etc.
(Note: any labour he completed we paid $60/hr and have no issue with paying that as extra)
He is now asking that all the invoices in which he billed for time as “site supervisor” is eligible for the additional 15% contracting fee.
Is this normal or double billing?
What does a 15% contracting fee normally include. Is this normal, am I being taken advantage of, is this double billing?
Wood a 15% contracting fee include management like originally discussed with builder?
Any advise is appreciated. Yes i am aware I should have had it all in writing but I do not, so please offer advise with that in mind.
Thank you kindly,
Thank you everyone for your opinions. A couple things I would like to clarify. There was never an agreement I would pay a site supervisor on top of the contracting fee. I agreed to pay any labour he completed as he did help with lots of back framing etc. All of the invoices received over the past 2 years always stated “Labour” so I had no reason to questions it as anything other than that. I trusted this is what I was being billed for. It wasn’t until a high bill that I did and asked for detailed work logs. He frequently delayed invoicing, the big bill was from Sept-Dec 2021 and as soon as it was reviewed I started to ask more question and delayed payments. I requested monthly invoiced to better watch his billing, he again delayed and next invoice was Jan-April 2022. I have not paid that.
No invoice, documentation, or conversations ever led me to believe he was working as a “Site Supervisor”, rather all supervisor/management tasks were apart of the 15% markup as we discussed at the beginning. I should add that most of his supervision (90%) was for he own workers that he had on site to help with back framing and various jobs like exterior insulation, fascia etc.
I would like to also add that the contracting draws on the invoices were always in correlation with the markup on all the trades/materials invoiced during that billing cycle– it added up. Now he’s adding (at the very end) that $580K of labour from his own workers including himself as site supervisor is part of the contracting 15% markup. I am quite confused as you would think this would hav been added as markup on every invoice, thus I would have questioned it earlier–it was not.
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