I don't see why a contract (cost plus or fixed fee) has to include the cost of appliances. IMHO appliances are NOT part of the house anymore than draperies or the television set are. In fact, we chose to buy our appliances separately rather than add them to our mortgage because appliances typically wear out and need to be replaced long before the mortgage is fully paid off. It is not sensible to still be paying on these things long after they're worn out! In your case, just tell your builder that you will be purchasing the following list of appiances and installing them your self and that they are not to be included in the contract. You will provide him with necessary information regarding water/electric/gas lines and the sizes of cabinetry opening necessary. If you're doing all the work of finding and purchasing the appliances and waiting for their delivery, and the appliance provider is doing the installation, why should builder get a percentage? He gets paid for running gas/electric/water lines to the appropriate locations so the appliances can be installed. Doesn't make any more sense that he should get a percentage of the price of the appliance than that he should get a percentage of the price of your TV, stereo system, electric toothbrush, just because you're going to be plugging them into the wall! IF he is going to be advising you on your selections, doing the ordering, waiting for installers to arrive, supervising installation, AND dealing with any issues that should arise if one of the appliances goes on the fritz 6 months after you move in, then it would make sense that he should get a percentage. Otherwise not.

All construction contracts must have a termination clause otherwise when one party whats to terminate the contract (and it might be you) no one will know how to resolve the outstanding issues without going to court which will benefit no one. Don't let the contractor make up a one sided contract; get a professionally prepared contract and use it or copy the relevant portions of it. Here is the termination section of an AIA 107 Cost of the Work contract: "ARTICLE 19 TERMINATION OF THE CONTRACT 19.1 TERMINATION BY THE CONTRACTOR If the Owner fails to make payment to the Contractor for a period of 30 days, the Contractor may, upon seven additional days' written notice to the Owner, terminate the Contract and recover from the Owner payment for Work executed and for proven loss with respect to materials, equipment, tools, and construction equipment and machinery, including reasonable overhead, profit and damages applicable to the Project. 19.2 TERMINATION BY THE OWNER 19.2.1 The Owner may terminate the Contract if the Contractor: .1 persistently or repeatedly refuses or fails to supply enough properly skilled workers or proper materials; .2 fails to make payment to Subcontractors for materials or labor in accordance with the respective agreements between the Contractor and the Subcontractors; .3 persistently disregards laws, ordinances, or rules, regulations or orders of a public authority having jurisdiction; or .4 otherwise is guilty of substantial breach of a provision of the Contract Documents. 19.2.2 When any of the above reasons exists, the Owner may, without prejudice to any other remedy the Owner may have and after giving the Contractor seven days’ written notice, terminate the Contract and take possession of the site and of all materials, equipment, tools, and construction equipment and machinery thereon owned by the Contractor and may finish the Work by whatever reasonable method the Owner may deem expedient. Upon request of the Contractor, the Owner shall furnish to the Contractor a detailed accounting of the costs incurred by the Owner in finishing the Work. 19.2.3 When the Owner terminates the Contract for one of the reasons stated in Subparagraph 19.2.1, the Contractor shall not be entitled to receive further payment until the Work is finished. 19.2.4 If the unpaid balance of the Contract Sum exceeds costs of finishing the Work, including compensation for the Architect's services and expenses made necessary thereby, and other damages incurred by the Owner and not expressly waived, such excess shall be paid to the Contractor. If such costs and damages exceed the unpaid balance, the Contractor shall pay the difference to the Owner. The amount to be paid to the Contractor or Owner, as the case may be, shall survive termination of the Contract." --------- In a Cost of the Work contract, the contractor's proposed cause about cost increases makes no sense and makes me wonder if the contractor understands how a Cost of the Work contract works. Perhaps the contractor means that when costs are greater than the "Budget Estimate" the owner pays the up charge but that is the definition of a cost of the Work contract. Or there might be a Guaranteed Maximum Price that he hasn't told us about. If both parties do not know how to structure a contract (and this appears to be the case) I suggest hiring a design professional or lawyer to advise you in order to avoid unnecessary costly disputes later. This post was edited by Renovator8 on Wed, May 28, 14 at 9:18

Thanks dixie and sue for your responses. I appreciate your information. In the end, I paid the interest charges and all the invoices that he has provided. I didn't agree with all of them but we decided it was worth it to just pay and get him out of our lives. The anxiety of having to deal with him just became too much and I need to focus on other things like my family who have lived in 5 different places (3 hotels!!) in the last year. We just need to get settled an move on. The only outstanding items are the 10% hold back which we will pay when the 55 days is up and the lien is removed. There are a few things that need to be completed on the house but we have arranged to get done. There were 10 outstanding items noted on the Oct 25th inspection but no safety issues so the city inspector allowed us to move in. The items were things like completing the tile tub surround, caulking around the tub, installing a range hood, inspecting the attic and installing a timer on a bathroom fan. We still don't have a CO and he is blaming that on us but it is because the cabinet guys haven't shown up to install a piece that is required before we can install the range hood despite us contacting them every 2 days. Everything else is done but only because we arranged to have it done. "Your GC must have been a delight to work with through this experience..." The fact that he cashed the cheque for final payment and then filed a lien against our house 3 hours later because we held back the legally required hold back is a good example of the sort of stuff we were up against. But to be fair it was a learning experience for us too. I wish I had found this board before we signed the contract. Our last build was easy and not stressful at all so although we did a lot of research we should have focused on different areas. For example, he has built a number of different homes but we discovered after the fact that they were all spec homes that people had bought while he was building. We were the first cost plus contract he has done. Looking back it is so obvious that it was a question that we should have asked but we didn't think of it. We were too focused on the quality of workmanship etc. Guess we will be smarter and more prepared if we are ever silly enough to build another home. :-) The most important thing is that over all we are happy with our house and in a few months I am sure I will be able to laugh about what an ass he was/is. I did tell him that I could not and would not budge on the holdback amount and if he wanted to sue me over it he could fill his boots. I pointed out that it would cost him money and the holdback funds would most likely be tied up until the spring due to court scheduling. Until I pointed it out I don't think he even realized that he was arguing about a date that would be long over by the time we went to court. The money would have been sitting in trust all along and the judge would probably ask him why his was wasting his time.

"...allowances themselves are not evil..." The problems with allowances are really very simple: Builders use allowances in various ways for their own purposes; reputable builders fully inform their owners about how the allowances were conceived; not so reputable builders do not. Many consumers, particularly first time builders, think that their construction cost in the construction contract, which included allowances is a maximum and all inclusive. When they can't get the desired and hoped for materials and work within a given allowance, many consumers are shocked, surprised and dismayed at the additional expenses reflected in the subsequent change orders. Many consumers, particularly first time builders, become overwhelmed by the myriad decisions and limited time frame for the choices which have to be made within the builder's normal construction sequencing and schedule. Waiting until construction to make all of these choices is fine for many experienced folks; it can be never-wracking from many other folks. Read the threads. At the end of the day, allowances all boil down to whether or not they are appropriate and "reasonable" for the nature and quality of the project, and if they reflect the owner's wishes. Think about the beginning of a construction project: how many consumers and builders are exactly on the same page at the time a construction contract is typed up? The too often answer is that each party is in their own individual world, based on their own similar experiences. Where does that leave consumers? If one's budget is large and flexible; If one enjoy shopping for and paying for one's own personal choices; if one's personality doesn't really mind "surprises" of a financial nature, where one or more allowances is insufficient to cover the expenses of an owner's desires; if one enjoys making selection decisions in a short time frame; if one has done all this before and understands how the process works...then allowances may not be much of a bother. On the other hand, if one wants their house priced all inclusively and wants to make the selection decisions up front and have them reflected in the total cost and schedule. the strategy is simple: eliminate all allowances. Everyone has a choice. But knowledge is power!