Question by cbmtrx: Contractors: Is it fair for a contractor to charge a 20% fee for cabinets&appliances that we bought ourselves?
We’ve just finished a kitchen renovation and we were stunned to find that all of our hard work tracking down good Ikea cabinets & appliances is essentially wiped out by a 20% “owner-supplied materials” costs. What on earth is THAT??
This was for cabinets and appliances that they installed during the renovation–so not only are they already charging for labor and their own materials, but they also tack on their 20% profit/overhead in ADDITION to this 20% fee!!
Many good answers–thanks.
There is a mention of 20% for “labor and materials” in the contract, but I has assumed this meant BUILDING MATERIALS that the contractor would obviously need during construction…nails, caulk, sandpaper…
So, no matter what you do, the contractor makes a profit on, essentially, ANY money you spend in the course of the project, whether it involved them or not. Wow. What a racket this is.
I’m a website designer by trade, and I would never DREAM of turning around and charging my client 20% for a copy of Dreamweaver or web hosting that they paid for!! All I charge for is building the site!
Yes, there was indeed a line saying “profit and overhead at the rate of 20% on all of the following: all Owner-furnished materials…” OWNER-FURNISHED MATERIALS?? Yeah, maybe paint and screws, but microwave ovens and cabinets?? I don’t get it.
“Materials” is such an all-encompassing term that they could pretty much throw in “dog food” and “water consumption” as billable items. …and all this ON TOP of a 20% profit/overhead on the total job cost! WOW!!
Answer by wizjp
It’s their way of covering the profits they lost by not supplying the cabinets. It’s not unusual; mechanics do it with owner supplied parts as well.
Check your contract; if it’s not specifically mentioned, I’d fight it; they might at least split it with you if you have a leg to stand on legally.
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