I’m building a house on cost plus , the owner wants to supply certain items himself , using a different contractor. do I get a fee for providing access an helping out the subcontractor?
A cost-plus contract is an agreement to reimburse a company for expenses incurred plus a specific amount of profit, usually stated as a percentage of the contract’s full price. These type of contracts are primarily used in construction where the buyer assumes some of the risk but also provides a degree of flexibility to the contractor. In such a case, the party drawing up the contract anticipates that the contractor will make good on their promises to deliver, and agrees to pay extra so that the contractor can make additional profit upon completion.
You should be aware, however, that there is a question as to whether a cost-plus contract is even legal for residential construction.
The regulations established by the Contractors License Board include the following:
§ 16-77-80. Homeowner contracts.
(a) All contractors shall provide homeowners with a written contract involving home construction or improvements which shall provide the following . . .
(2) The exact dollar amount due from the homeowner under the contract;
Since there is no exact dollar amount for a cost-plus, there is an argument that contract is illegal.