Beware of the "allowance" game. Avoid large mark up change orders. Let our attorneys explain how contractors use their superior knowledge to give a low bid by hiding the real cost in "allowances". An allowance in a construction contract is an amount specified for certain items of work, but the details are not determined at the time of contracting. Allowances in construction contracts are used to determine purchases for lighting fixtures, floor coverings, window treatment, and much more.
Allowances can be practical if a contact item has not yet been chosen or specified. However, allowances can also be dangerous to the buyer because it could add up. If the value of the allowance is less than the amount needed to make the actual purchase for an item, then the money to purchase the item comes out of your pocket. For example, if there is a $1,000 allowance for a light fixture budget, but the actual cost is $1,200, then $200 would come out of your pocket. Allowances in contracts can easily add up to a huge cost if you are not aware of the allowance game and how to avoid these pitfalls.
Make sure the terms of all contracts and agreements are followed from start to finish. When you enter into an agreement with a contractor, you have very specific expectations regarding a project time frame and expenses. Our attorneys can help you spell out the obligations specifically to avoid later conflict. Our attorneys use nationally recognized standardized contract packages for construction projects which gets rid of the bias in favor of the party propounding his or her in-house attorney created contract. |
