When to Pay for Remodeling Plans
DEAR TIM: My husband and I are remodeling our home to accommodate for our new arrival. We've been working with an architect who is not fully licensed at this time. This individual has been drawing up plans for our new project. The plans are not yet signed and sealed as he wants to send them to a licensed architect to have this done. But he wants us to pay the full amount of the plans prior to getting them signed and sealed. We're not sure if we should pay for the plans until everything is finalized. Please let me know if we should pay for them up-front or if we should wait until the plans are completely done. Julie S., Orlando, FL
DEAR JULIE: Congratulations on the expanding family! The answer is very simple if you ask me. I feel you should never pay in full for something until such time as you are completely satisfied. The fact that the unlicensed architect-to-be asked for the money before the job is complete is very troubling to me.
Why should you not pay in full?
There are all sorts of reasons you should not pay in full until the job is complete. The money in your account is the only leverage you possess. The instant you hand over all of the money for the plans, you then rely on integrity, hope and good will to get what you want. This individual may have all of these qualities and more, but I do know he does not yet possess good business sense.
I can produce countless examples in the real world where you do not pay for things in advance in-full before you get them. There are many things where you do put down a deposit and possibly make timed payments as the work progresses, but to pay in full before delivery is a recipe for disaster.
Learning the hard way!
Here is a true story that just happened to the son of a close friend. This young man wants to become a commercial pilot. He signed up for flying lessons and all the necessary ground school training to get the commercial license. The cost was staggering - somewhere above $15,000. My friend co-signed a loan for his son with a bank, took the funds and paid the flight school for the flying lessons and schooling. They did this in advance to get a slightly reduced price. A month ago, the flight school went bankrupt and the son only had 10 percent of his training complete.
The son and father still owe the money to the bank and they have virtually nothing to show for it. A similar thing could happen to you. This unlicensed architect may have made an enormous amount of mistakes in your plans. It could take many hours of redrawing to correct them. Once he has the money, he may be reluctant to make the changes in a timely manner. One thing we know for sure is that his incentive to do so will be greatly reduced. In fact, he will find that the additional work will create a large mental obstacle as he feels he is not getting any money to correct his mistakes should they exist.
How would you like to use my specifications for your new home? I will gladly share hundreds of my tips and building secrets with you and your builder. Check out my New House Specifications. 100% Satisfaction Guarantee!
At this point in time, you have enormous leverage. The plans he has been working on are of no value to anyone but you and your husband. No other homeowner would have interest in them as they are house-specific remodeling plans.
You simply tell this person that you are more than willing to write a check for 90 percent of the total due once the plans are signed and sealed by a real licensed architect. You then tell the architect-to-be that the remaining 10 percent of the money will be paid as soon as the building permit is issued. Keep in mind that the building department may request minor changes in the plans before a permit is issued. You still want to have some financial leverage in the event this happens.
Column N13