What is 50% Completion of a fire gut restoration?

[geiser093]

We are about to start a job on a home that requires extensive renovation due to a fire. The project is right at six figures. We have a 57 page estimate from the adjuster. Chase is the bank for the mortgage and has control of how the funds are released.

My question is what is the normal or standard they consider 50%. I have been told Elect, Plumb, Drywall, Paint???

 

[ICE]

There is no "normal" when it comes to insurance companies.

 

[conarb]

Insurance companies and banks disburse monies differently, it sounds like the insurance company has put the money in the bank, a contractors' typical 5 draw plan is 5 payments of 20%:

1. First payment is subfloor nailed down, I once built a 3 story home and didn't get the first draw until I had the third floor nailed off.
   
2. Second payment is when roof is watertight, electrical, plumbing, and HVAC in and passed rough inspection, house walls watertight.
   
3. Third payment is all sheetrock/plaster taped and finished, all trim installed including fireplace mantle.
   
4. Fourth payment is when city has finaled the house and the owner has accepted it, in some form like moving in.
   
5. Fifth payment is 35 days after the owner has filed a notice of completion and the title company has issued a lien-free waiver to the bank.
   

As you can see a contractor has to advance at least 20% to get to the first draw, if it's a home with a complex foundation and/or multi-stories much more, in California a contractor can lose his license if he ever manages to get ahead of the schedule. At the end the owner is living in the home and the contractor has 40% of his money outstanding, this is to be sure everything is done right, everybody working on the property has been paid, and there are no mechanics' liens on the property.

I don't understand what 50% has to do with anything, you could go to the adjuster's cost breakdown and calculate when 50% has been completed.

 

[cda]

It probably depends on each job

If complete tear down and rebuild maybe after sheet rocked

If just interior work, maybe once all walls are put together and painted

 

[north star]

& " & " &

geiser093,

IMO, ...I would contact the Chase Bank representative

who has the control of the monies, and ask them to provide

you something in writing, of what they will accept.

& " & " &

 

[geiser093]

& " & " &geiser093,

IMO, ...I would contact the Chase Bank representative

who has the control of the monies, and ask them to provide

you something in writing, of what they will accept.

& " & " &

That is what I am going to do just getting a little input from here first.

Thanks

 

[conarb]

That is what I am going to do just getting a little input from here first.Thanks

Geiser, why do you care? it's the job of the general contractor to provide the working capital to do the work, the bank then partially reimburses him for the work done prior to completion. A contractor has no business taking a contract if he is under-capitalized, the bank sends bank appraisers out to inspect the work and authorize the draws. If Chase allows more money distributed than has been invested in the real property their security for the mortgage is impaired and if the contractor goes broke they would be forced to foreclose a property with impaired value, or pay another contractor to finish it up.

 

[steveray]

More clarification on the "50%" and why it is a significant number would be good..