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July 2018 Tip of the Month


Honestly, we here at Abo and Company are not necessarily real estate experts. We’re just business and individual advisors that enjoy helping clients make income, make more income, avoid losing income, avoid unnecessary risk and avoid expenses when possible. Still, we like to learn from the experiences of our clients, good and bad, and see if we can pass such along to others who so learn from. In that regard, here are items we gleaned from realtors and developers that impressed us and we believe you might so apply.

We’ve found that every landlord seems to have horror stories about contractors that perform defective work, leave jobs partially finished or impose charges never mentioned at the time the contract was signed. Here are some of the common techniques we’ve seen been told have been used to inflate costs:

  • Submitting invoices for work only generally described and not specific about the actual work done.
  • Performing unauthorized work for the tenant and billing the property owner.
  • Billing for services or work never performed.
  • Performing unnecessary work.
  • Using incorrect labor rates not specified in the contract.
  • Adding charges for a subcontractor when a subcontractor was not utilized.
  • Billing for unessential personnel
  • Rounding up partial hours to the next whole hour if the contract calls for payment on an hourly basis.
  • Inflating travel time.
  • Double billing for items back-ordered or for work not yet begun.
  • Including late-payment fees even if these are not specified by the contract.
  • Incorrect computation of sales taxes that include labor charges, etc. which may not be taxable.
  • Charging for brand name parts when generic or used parts were used.

Unfortunately, these practices are common, especially where the contractor senses that the property owner is lax. To minimize overbilling, we recommend that: (1) work to be performed is spelled out in the contract; (2) billing rates, labor rates, etc. are spelled out; (3) the property owner or a representative observes performance of the work and approves it upon satisfactory completion, and (4) all billings are carefully scrutinized for accuracy and supporting documentation before any payments are made. 

Call Abo and Company for assistance with recommendation 1, 2, 3 or 4 above? NO WAY! We just wanted to so pass along some “best practices” we’ve seen employed. You can and should call Abo and Company if you need the contact info of seasoned lawyers, realtors, developers, consultants and other such professionals we feel can fill the need. Glad to help.