Cure for Terribly Slow Ivan: The Carrot and Stick

Stop me if you’ve heard this before:

You loved what your contractor did with your home; how he built the kitchen of your dreams or turned the old rumpus room into a high-tech family entertainment center.

But you hated the length of time it took him to complete the job, and how he never showed up when he said he would.

I think I found a solution.

I call it a bonus/penalty clause. It gives a contractor the incentive to complete a job on time, and it gives the homeowner the leverage to make sure the contractor hits a deadline.

My wife and I have been through two remodeling jobs with the same contractor. We didn’t use the bonus/penalty clause the first time, but we used it the second time. The second time was definitely a better experience.

Our current home was a 35-year-old ranch-style fixer-upper when we bought it from its original owners in the spring of 1987.

We were on a tight budget, so we took the experts’ advice and bought the cheapest home in the best neighborhood. We figured we could update it by tearing out and adding on, and eventually we would have the home we always wanted.

The first project was the kitchen. Essentially, it needed to be gutted and completely redone. We found our contractor (I’ll call him Ivan) through a friend of a friend.

Ivan was a real character. He listened to classical music on the radio in his old, beat-up pickup truck. And he had an annoying habit of talking for hours about any subject. You name it, he was the authority.

But we liked his enthusiasm, his charm and the creative ways he turned our vague notions into exciting, workable concepts.

Ivan had one major character flaw. He had absolutely no concept of time. He was always late. If he promised to be there on Monday, he showed up on Wednesday. If the appointment was for 9 a.m., he arrived around noon.

But we tolerated it because Ivan did very, very fine work. He cared deeply about his craft, and he took pride in every project.

We met for the first time in June, 1987. To make a very long story short, the plan was for him to begin work in August and to complete it sometime in October so that we could host our family’s Thanksgiving celebration in our new kitchen.

Instead, work did not begin until mid-September, and Ivan was still adding the finishing touches Christmas Eve as our guest arrived. We celebrated Thanksgiving at the in-laws.

And, oh, by the way, we went way, way over budget, too. In fact, we ran out of money before Ivan could complete the extra bathroom he had begun for us. It remained an empty shell for another 18 months.

But we learned a very valuable lesson: Going over budget and overtime was as much our fault as it was Ivan’s. To save money we should have known exactly what we wanted before the project started (many of the cost-overruns were due to higher than expected fixture and appliance prices). To save time, we should have set deadlines.

So we hired him again in May of 1989 to finish the bathroom and to build an entertainment center.

This time we knew exactly what we wanted. The plumbing and dry wall were already completed in the bathroom, and it had already been painted. All he had to do was install the fixtures and cabinets, complete the shower stall, lay the tile and carpeting and build the entertainment center to our specifications.

Ivan’s estimate came in at $9,300. Before we signed the contract, I insisted on a bonus/penalty clause. Various friends and relatives had suggested it before we started the kitchen, but I didn’t think it was necessary at the time. This time I was going to try it.

Here is how it worked: Ivan and his crew were to begin work on May 15, 1989. I told him if he completed the job by July 1, I would pay him a cash bonus of $500. If he had not completed the work by then, I would begin deducting $100 from his estimate for every working day (including Saturdays) he went beyond July 1.

Ivan resisted at first, but I reminded him how long the kitchen had taken to complete. I told him I didn’t want him still working on the bathroom in the fall. And, besides, six weeks was certainly more than enough time to complete the job.

Ivan asked for a one-week grace period between July 1 and July 10. If he completed the job during that time, he would receive no bonus, and I would not deduct any money from his bottom line. I agreed.

Work began right on schedule and proceeded at a good pace for two weeks. It looked like the incentive clause was doing the trick.

But then Ivan’s tile man didn’t show up one day. Or the next day. Or the next. So he hired some tile men he had never worked with before. They showed up on schedule but took longer to complete the job because of problems with the way the shower stall had been framed.

Then the commode was installed incorrectly, and when the fellow came back to correct the job, he leaked water all over the new carpet, so the carpet guy had to come back a second time.

Then the shower door didn’t arrive on time.

We had a clause in the contract that if any delays occurred because of circumstances beyond Ivan’s control, (such as shipment delays by vendors) the incentive clock would be reset. But that wouldn’t be necessary here.

Ivan had simply not ordered the shower door on time. And 10 days before the July 1 deadline, with shipment still 14 working days away, it was evident that he wasn’t going to receive his bonus.

If I were Ivan I would have worked harder to make sure I at least made the July 10 deadline. But after it became apparent he wasn’t going to make the bonus, the workmen stopped showing up altogether.

July 10 arrived, and the bathroom and entertainment center remained unfinished. The penalty clock began to tick.

And I began to smile. When Ivan went overtime on the kitchen, I hollered and kicked furniture and generally worked myself into a helpless frenzy. This time I knew that every day he went beyond our deadline, I saved another $100.

Long story short: On Saturday, August 5, about 9 p.m., Ivan finally completed the job.

The inspector signed it off the following Wednesday. On Thursday, Ivan showed up with his final bill for $1,300.

I got my calculator out. Between July 10 and Aug. 5 there were 24 working days. We presented him with our bill: $2,400.

The net result: Ivan owed us $1,100. The $9,300 job was only going to cost us $6,900.

I took pity on him. I told him I had some electrical work I wanted done around the house that would be worth $1,100 to me. He agreed to do it.

This proved to be a mistake. The bathroom and entertainment center had been completed, I had won my moral victory with the bonus/penalty clause, so I relaxed and let time slide by.

By the end of August, he had not begun the work. Between September and Dec. I called periodically. He always apologized with this or that excuse, and he always promised to show up the next day.

But he never did.

On Jan. 2, 1990, I wrote Ivan a letter, reminding him of our agreement:

” . . . call it a New Year’s resolution,” I wrote, “but I don’t want people taking advantage of my good nature anymore. We like you, Ivan, and we think you do terrific work. But business is business. If you had completed the job July 1, we would have paid the $500 immediately. Now we expect you to honor your side of the agreement.

“I expect payment on or before Wednesday, Jan. 31, 1990.”

Jan. 31 came and went and we still did not hear from him.

I called. A secretary answered the phone, (he was expanding). I left a message. He didn’t return my call. I left a message the next morning. Still no return.

I called again the next morning and Ivan answered. He made some excuse about having been up all night with his new baby. I lost my temper.

“Ivan, we have a new baby, too. And I was also up all night. But that has nothing to do with the money you owe us.”

“I have a payment from another job coming in a couple of days,” he said. “No!” I yelled. “We want the money today!”

We agreed that he would have our money delivered that evening. I still didn’t believe him when I hung up the phone, but his secretary showed up that evening with our money.

We haven’t spoken to Ivan since.

Looking back, I know now I should have requested the $1,100 from Ivan in the first place. But I came away from the whole experience satisfied that my wife and I had been satisfactorily compensated for our wait. The bonus/penalty clause works.

We are now planning to add a family room and a master bedroom and bathroom next spring.

But we’re looking for a new contractor.