Hi all. I’m writing up a contract for a custom home build and came upon a question concerning who pays the utilities. Builder or homeowner? In the past we have done cost plus contracts where I as the builder paid all utility costs (hookup and monthly bills) until project completion and billed the homeowner the cost plus a percentage. Upon completion, the utilities were placed in the name of the owners.
This project will be done with draws through a bank at a fixed cost. We plan on providing utilty hookup as part of our costs but hadn’t thought of the monthly bill. Do we pay these through completion even though we won’t get reimbursed, or do we have the bills sent to the owners?
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My guess...the account w/ the power company is established in the name of the owner of the property/residence. Bills are sent there. You shouldn't even see them. It's the way I've seen it done, but don't know if other people have other practices.
either way the HO will pay for the utilities and connections. If you pay the utilies and hookups you should estimate the costs of the utilities at your highest load and tack on 10-15% markup for your time to recieve and pay bills on top of your best estimate for utilities costs plus hookup. Your time and bookkeeping efforts must be realized in this affair.
But in all restrospect id say whomever owns the lot pays the utilities and hookup costs for ease.
Wny would the utilities purchased to build the house be treated any differently than the nails purchased to build the house.
I don't think there's a wrong way of handling it, as long as it's spelled out clearly so there are no misunderstandings.
I guess if you pay for the electrical and add on a percentage, you could reasonably expect to make a little money off of it.
But if the HOs are tight, the added cost might make your contract look more expensive than someone who has the HO pay it.
Too bad stupidity isn't painful.
Around here, Florida, it seems standard that the electrical subcontractor that installs the temporary power pole, usually for a set fee based on the anticipated cost of setting and retrieving the pole, and sets up an account with the utility. Typically a few hundred dollars.
The cost of electrical usage, usually only a few dollars a month if it is not used for job site heating or AC, is bundled into the cost of the power pole rental. About $60 or $70 per month. Once the house is completed the account with the utility serving the temporary power pole is closed, the lines disconnected and the pole removed. Everything after that, opening a new utility account in the HO's name and having the drop installed by the utility, is up to the HO.
Thanks all. We signed a contract with owners paying monthly bills and we pay for hookups. They will be charged for the hookups of course as part of my bid. I just hadn't figured the monthly costs into the bid and didn't want to get stuck with their utility bills. It was just an oversight and I didn't want to sound cheap at the signing of the contract.