Posted on: 24 October 2016
If you are nearing the completion of the building phase of your new home construction and are concerned about the quality of the electrical components and/or the skills of the project manager, you may be wondering what your options are. Fortunately, you do have some options as the owner of the house that is being constructed. Here's what you need to know.
Creating a punch list
When you are building a home, a walk-through will be necessary at the end of the construction phase. This is done to create what is called a punch list. This lists all the flaws that are found, which are considered either reasonable or unreasonable. Reasonable flaws, such as the wrong electrical outlet cover colors, do not affect the quality of the home and may not be repaired.
Unreasonable flaws, such as not enough electrical outlets in a bedroom to meet building codes and ordinances, do affect the quality of the home and will need to be repaired in order to make the home habitable. This type of scenario can cause a fire hazard with overloaded electrical circuitry. In fact, the third leading cause of structure fires in homes is due to faulty electrical distribution systems.
Hiring new electrical contractors
These types of issues may be due to incomplete planning and scheduling on behalf of the project manager or due to the workmanship of the electrical contractors. Either way, it can be difficult to trust the same contractor to do the repairs correctly. However, since you are the owner of the house, you can hire other electrical contractors to complete the work to your standards if the original crew did not.
When you interview potential replacement electrical contractors, be sure to ask them whether they have any experience in correcting mistakes in new home construction. Some electrical contractors specialize only in new home construction, and some only specialize in repairs. You'll need to find someone who has experience in both types of electrical contracting work. Also, make sure the company does not subcontract the work to another electrical contractor.
Paying the new electrical contractors
To do this, you will need to have the bank approve the new contractors so they can be paid out of escrow in your construction loan. That means you may need to set more money aside in escrow for the new contractors, especially if your budget is tight. This could mean you may need to get a line of credit or increase the amount of your construction loan.
As with the original contractors, the replacements need to be paid prior to working, especially if they need to purchase any supplies to complete their jobs. You don't want subcontractors to work on the home because you won't have proof of immediate payment from the bank. This is why subcontractors typically put what's called a mechanic's lien on your home, which can be used as a type of "promise to pay." Essentially, this gives the electrical contractors the right to secure interest or equity in your home until they are paid.
Inspecting the repairs
After repairs to the punch list are completed, another walk-through will be done during which you will be able to check off all the repairs from the punch list. It's important to not rush through this process in the excitement of finally being able to move in. It's a good idea to have a real-estate agent or a home inspector with you during each walk-through. When you are given the okay, it will be time to have the local building-code authority inspect the property to approve of the repairs. It's a good idea to have the new electrical contractor present during this inspection.Share