Adobe Stock/
Adobe Stock/

It is not entirely uncommon for a remodeler contractor to deal with government agencies during the course of their work. A homeowner may have run out of money and be getting a loan from the bank. In some cases, if the loan is large enough, the homeowner may be required to use a U.S. Department of Housing and Urban Development (HUD) consultant to help with the process.

Consultant Michael Stone shares one such example on Markup and Profit. In the example, the remodeling business had already performed two jobs for the homeowners, and the loan and HUD consultant were to help facilitate the final phase of the project. Stone shares advice on how to deal with such a situation, especially when the consultant proves difficult to work with.

They need to make clear to everyone that their contract is not with HUD, it's with the homeowner. The contractor should have every right to put the homeowner between them and the HUD consultant.

They can include contract language that says this is how they are going to build the job. If the HUD consultant has any concerns during the project, he can deal with the homeowner who will share those concerns with the contractor. If the concern is a specific code violation, the contractor will deal with it immediately.

The contractor should include a daily penalty in the contract for any delays caused by outside sources (like HUD). It's the owner's responsibility to keep pressure on the HUD people to make inspections and payments on time. The homeowner has far more influence on HUD than the contractor has. The contract should state that they won't allow a delay on the job unless there is a legitimate code concern on the job.

Read More