I had a plumber work on my sewer line, and unfortunately, they excavated too much, resulting in significant damage that they can’t repair themselves. They’ve accepted full responsibility and signed a document acknowledging this. They’ve also filed a claim with their insurance.
Now, I’m faced with the need for a general contractor, concrete specialist, engineer, etc., to handle the repairs. My question is about the best way to structure the contracts moving forward. The plumbing company has agreed that I can choose the contractors, but I’m unsure how the billing should be handled.
If the contractors bill me directly, I’ll have more control over the process, but I’ll need to pay out of pocket and then seek reimbursement from the plumbing company later. On the other hand, if the contractors invoice the plumbing company directly, I lose some control since they won’t technically be reporting to me. What’s the best approach in this situation?
It sounds like you’re in a complicated situation, but it’s great to hear that the plumber is taking responsibility. Here are a few options to consider for structuring the contracts going forward:
Direct Billing to the Plumbing Company: Since the plumber has accepted responsibility and is working through their insurance, you could have the contractors bill the plumbing company directly. That way, you won’t have to front the money, and it will simplify the payment process since the plumber’s insurance will be handling the claims. However, to maintain control, you can include a clause in your agreement with the plumber that gives you oversight of the contractors’ work and costs.
Reimbursement Arrangement: You could have the contractors bill you directly, but with a clear agreement that the plumber will reimburse you for the amounts paid. To keep this structured, you could set up a timeline for reimbursement that the plumbing company must adhere to after you provide proof of payment. This would keep you in control of managing the contractors while also ensuring the plumbing company is responsible for funding the repairs.
Third-Party Escrow Account: Another option is to set up an escrow account where the plumbing company deposits funds to cover the repairs. The contractors can then bill the escrow account directly. This way, you have control over the contractors while ensuring that funds are available, and you won’t be left out of pocket.
Joint Contracts: You can also explore the idea of having joint contracts with the contractors that stipulate the plumbing company as liable for payment. This may give you more assurance that the plumbing company will honor its obligations.
Regardless of the route you choose, make sure to document everything and keep communication open with all parties involved, including the plumbing company and the contractors. It may also be wise to consult an attorney who specializes in construction law to help you navigate this process and ensure your interests are protected.