What is the standard way of paying a contractor?

[Tommy2000GT]

The rest of the laundry list posted by Tommy is potentially a great deal of work and money.

I have no opinion on the cost, especially without knowing the style of building and foundation requirements. I've briefly ball-parked adding about the same space to the back of my little bungalow, and I come up with 50-80K, with no new kitchen in the mix.

$320 a foot is a good deal anywhere in the Bay Area, and a steal in SF. $400 to $450 a square foot is common around here.

Yep, welcome to the Bay Area, where everything cost an arm and a leg 🙁

 

[Tommy2000GT]

The contractor pulled the permits gave me the receipt for the permit fees. He has never done work in my city so they charged him a fee for a business license which also on the receipt.

It's only $200 but I'm 99% sure I shouldn't have to pay it but I just wanted to make sure.

 

[Greenman]

The contractor pulled the permits gave me the receipt for the permit fees. He has never done work in my city so they charged him a fee for a business license which also on the receipt.

It's only $200 but I'm 99% sure I shouldn't have to pay it but I just wanted to make sure.

City business licence is a cost of doing business, it shouldn't appear on your bill. A contractor has to buy a business licence in pretty much every city he works in, that's part of his overhead. Unless he specifically mentioned it in the contract, it's his bill, not your's because it isn't a direct construction cost.

 

[homebrew2ny]

I would have them use a standard AIA form.

Break the billing in to multiple definitions as per the job/task and attribute a reasonable price to each totaling $80,000. Hold back 5% or 10% retainage per each definition until the job is complete 100%.

Standard billing should occur each month, or for smaller projects 2 times a month (1'st & 15'th).

 

[Greenman]

I would have them use a standard AIA form.

Break the billing in to multiple definitions as per the job/task and attribute a reasonable price to each totaling $80,000. Hold back 5% or 10% retainage per each definition until the job is complete 100%.

Standard billing should occur each month, or for smaller projects 2 times a month (1'st & 15'th).

AIA contracts don't meet California home improvement contract standards. I just went through this with a client who insisted on using one. I had to add all the required notices by hand. They're also a pain in the ass to use as you can only modify them on the AIA website.

I've never heard of "standard billing". My payment schedules are always landmark based. It's easy to assemble, easy for the client to understand, and easy to track.
Line item retainage may be used in commercial work, but I've never seen it used in residential remodeling/additions. It's generally just the finial ten percent due at completion.
In an aside to all of that, contractors get very suspicious of clients that are reluctant to pay promptly, and it will effect the pricing on future changes or upgrades. The idea being that if you're going to have to wait to get paid, you should be paid for waiting.

 

[Tommy2000GT]

City business licence is a cost of doing business, it shouldn't appear on your bill. A contractor has to buy a business licence in pretty much every city he works in, that's part of his overhead. Unless he specifically mentioned it in the contract, it's his bill, not your's because it isn't a direct construction cost.

I talked with the contractor and he agreed that he will cover the business license. So it looks like everything is a go now and demolition has started.

 

[Greenman]

I talked with the contractor and he agreed that he will cover the business license. So it looks like everything is a go now and demolition has started.

Good news. Keep everything up front and reasonable and your project should go well.