Pool builder on news tonight in Houston, "nightmare pool build"

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And that's just the one major story that gets covered. Imagine every year how many people get scammed or left hanging by a lousy pool builder. As we always say here - get multiple quotes from reputable pool builders and demand a list of current and former references. Never pay 100% up-front, get lien-releases from all subcontractors and always hold back a minimum of 10% until the final punch-list is completed. Do your homework because it is far too easy for shady characters to call themselves "contractors" (especially in states that don't require registration or contractor's licenses to operate) and take people's money.
 
This was our worst fear too. But with the Home Improvement loan we got, they withhold the last 10% of the loan funds until we sign off that we are happy with the pool. They also have the Pool Builder sign lien paperwork, and we all (bank, PB, and us) have to all sign to release the lien before they fund the last 10%. This was a huge relief to us, because we got burned big time on the patio we had built last year, and were really worried about getting burned on the pool too.
 
Our pool builder took $1000 down last Fall to hold our spot this year then didn't ask for a dime more until we were swimming and happy. I was pretty shocked with that but he's a guy who has been doing it for 30 years and stands behind his work. I contracted out the concrete, fence, etc. and those guys asked for progress payments which was totally acceptable.
 

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Many times if the builder is asking for a lot upfront or all of it, it's because his finances are a mess or shady and he's trying to pay off the last job using the current book of work. Eventually they run out of other people's money and then the house of cards comes crashing down.
 
JoyfulNoise said:
Many times if the builder is asking for a lot upfront or all of it, it's because his finances are a mess or shady and he's trying to pay off the last job using the current book of work. Eventually they run out of other people's money and then the house of cards comes crashing down.
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That's EXACTLY what happened here. Most likely these crooks will just open up under a different pool company name, build a few pools, get into financial trouble, destroy some families dreams of an awesome pool and start the cycle again.
 
Arizona state law requires final payment prior to plaster

http://www.azleg.gov/ars/32/01158-01.htm
Code: 
     2.  The following payment provisions:
       (a)  A down payment payable on the execution of the contract of not more than one  thousand dollars.
       (b)  After the completion of the excavation work on the swimming pool or spa, a  payment of not more than thirty per cent of the amount of the original contract price  plus any written change orders approved by the purchaser.
       (c)  After the installation of steel, plumbing and pneumatically applied concrete  materials or the installation of a prefabricated swimming pool or spa, a payment of not  more than thirty per cent of the amount of the original contract price plus any written  change orders approved by the purchaser.
       (d)  After the installation of decking materials, a payment of not more than thirty  per cent of the amount of the original contract price plus any written change orders  approved by the purchaser.
      [B] (e)  Before the application of the finishing interior materials or completion of all  work on a prefabricated pool or spa, payment of all remaining sums due on the original  contract plus any written change orders approved by the purchaser.[/B]



 
One of the things I loved about our pool renovator/landscaper/backyard overhaul genius is that he proposes a series of "gates". As certain project milestones were completed, a reasonable payment was made. For example:
- Project start
- Demo completion
- Plumbing installation
- Coping installation
- Liner install
- Patio paver install
- Deck completion
- Landscaping
- Final signoff

etc - there were actually more milestones with more payments, each a reasonable amount as things completed. I much prefer this to the typical "1/3, 1/3, 1/3" scheme we see so often. Meant I had to write a few more checks, but holds both the pool builder and myself accountable throughout the project. He, to keep going, and me, to sign off as each phase moved forward, rather than complain about something at the end.
 
This is how ours worked too and thought it was fair.

dmurphynj said:
One of the things I loved about our pool renovator/landscaper/backyard overhaul genius is that he proposes a series of "gates". As certain project milestones were completed, a reasonable payment was made. For example:
- Project start
- Demo completion
- Plumbing installation
- Coping installation
- Liner install
- Patio paver install
- Deck completion
- Landscaping
- Final signoff

etc - there were actually more milestones with more payments, each a reasonable amount as things completed. I much prefer this to the typical "1/3, 1/3, 1/3" scheme we see so often. Meant I had to write a few more checks, but holds both the pool builder and myself accountable throughout the project. He, to keep going, and me, to sign off as each phase moved forward, rather than complain about something at the end.
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In some States, there are strict laws on how much a contractor can ask for as a down payment; and there are some states with almost no regulations on contract payments whatsoever. Some states require that any home improvement project over a certain amount (eg, $30k in North Carolina) requires the GC to be licensed by the state and have sufficient operating reserves to practice, while some states have no licensing requirements at all (any person with a hardhat, hammer, and a level can call themselves a GC). It all depends on where you live.

As for contractors accepting many smaller payments, that's all well and good, but it is definitely not the norm.
 
It's a good idea to make the final payment as large as the PB will tolerate. We hear of some with just 5 or 10% as the final payment, which leaves the owner high and dry if the PB walks.
 
Our PB took an initial Good Faith payment of $1000 when we signed the contract. The installments were then divided into 4 payments with the last payment being 10% of the total and due on the day the interior was installed... UNFORTUNATELY, and I don't know what our PB was thinking, but he was asking for final payment before we were ever even scheduled for final inspection... My husband had a discussion with him about this payment, and the next thing you know, there was a 6 week delay in our build, followed by 2 failed inspections, and little-to-no communication. After all this chaos, we decided to forego the final installment being paid on the day of the interior being shot until my husband could meet with the PB to go over any issues we had with our build. It just amazes me what some small business owners try and get away with.
 

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