My understanding of holding funds is that it should be on the order of 150-200% of the cost of work to still be performed. With my GC, we had the final payment earmarked to coincide with the passing of the final inspection. Our final inspection is still not signed off on due to one remaining item to be completed (glass shower doors being done by someone else). I paid him the final payment minus about 150% of the cost of that item and will pay him the remainder upon sign off by the inspector. Seemed fair to me.

As for allowances, you should definitely ask for copies of the receipts. In the end I was involved in the purchase of most if not all of the allowance items myself, and settled up with the GC at each payment after those items were purchased and installed (e.g. fixtures, granite counters, tile etc...) In the future I would not do any allowances and just source them myself.

Sounds like your contractor has a bit of an accounting problem. The first thing is to sit down and make sure you are on the same page..what the allowances are, how much has been paid, how much remaining...you don't want to pay him and then figure it out.

Anywhere from 5-20% is retainage to complete a project. But, you have to be fair. If you are waiting on (like the example) just a set of shower doors to be done by others, then 150% of that is fair.

If, on the other hand, there is still a bunch of "this and that" to be done by the contractor, then definitely hold some out. "This and that" is often underestimated by contractors themselves and you want leverage to make that guy have an incentive to get back and finish.

He might not think he's asking for most of the money, he might have a much higher final cost in mind than you do.

Go over your numbers now, write everything down, and let him know what you expect the total to be. Asking him for receipts is perfectly reasonable. And it's reasonable for him to mark things up slightly (he ordered them, picked them up, stored them), don't expect to pay exactly what the receipt says.

I don't know about receipts - it depends on how the contract was drawn. It may shock you to know :) that builders etc, make a lot of their money on markups, just as stores do. However, if your contract was that it was cost plus, then I guess ask away.

Don't part with too much, as said, and don't make the final payment until the inspector approves the work....assuming you have a building permit?

I spoke with the contractor and he was soooo annoyed during the whole conversation. After about 20 minutes, it was very clear that he was annoyed because I was right. Anyway, he agreed to be much less agressive with collecting payments. I will not have to pay the last bill he sent which means I owe 7% of the total job. Finally, I told him I want all material on site (there were delays due to materials not being on site and a back up in case he didn't finish) AND I told him AFTER all the work was done, every spot spackled, primed and painted, THEN he could bill me, then I would take 2 weeks to pay (which is in the contract). I told him, due to the aggressive bill collecting in the past (he asks me for payment 20 minutes after handing me the bill!) I wasn't going to consider accepting a final bill unless the whole thing was done. Not mostly done, just a little thing here and there. He was sort of annoyed but agreed. Luckily, he isn't here most days and it is the foreman I deal with. What a grouch. He really took it personally even after I said not to that it is just good business. I would be stupid to do it any other way.