{"id":1352,"date":"2016-10-01T06:06:19","date_gmt":"2016-10-01T11:06:19","guid":{"rendered":"http:\/\/homeadditionplus.com\/dev\/?page_id=1352"},"modified":"2017-05-17T18:19:35","modified_gmt":"2017-05-17T23:19:35","slug":"home-building-contractor-allowances","status":"publish","type":"page","link":"https:\/\/homeadditionplus.com\/dev\/home_articles\/home-building-contractor-allowances\/","title":{"rendered":"Home Building Contractor Allowances"},"content":{"rendered":"<h4><span style=\"color: #008000;\"><strong>Contractor Allowances are Funds Set Aside by the Contractor for the Homeowner to Select Certain Building Materials<\/strong><\/span><\/h4>\n<p>By Mark J. Donovan<br \/>\n<script type=\"text\/javascript\"><!-- google_ad_client = \"pub-3988490936633155\"; \/* Homepage_Home_Improvement_468x15_ATF, created 8\/13\/10 *\/ google_ad_slot = \"6539705898\"; google_ad_width = 468; google_ad_height = 15; \/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\" src=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script><\/p>\n<div class=\"KonaBody\">\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td width=\"50%\">\n<p align=\"center\"><script async src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script><br \/>\n<!-- New_300x250_051317 --><br \/>\n<ins class=\"adsbygoogle\"\n     style=\"display:inline-block;width:300px;height:250px\"\n     data-ad-client=\"ca-pub-3988490936633155\"\n     data-ad-slot=\"4202793463\"><\/ins><br \/>\n<script>\n(adsbygoogle = window.adsbygoogle || []).push({});\n<\/script>\n<\/p>\n<\/td>\n<td width=\"3%\"><\/td>\n<td style=\"text-align: left;\" width=\"47%\"><strong>Question:<\/strong> Mark, I read with great interest your &#8220;Home Building Contractor Checklist&#8221; article as my husband and I are in the process of starting a home building project and about to sign a contract for same. Thanks to you and your home building checklist article, my husband and I were able to be more educated with what a home building contract should include. I am thankful that I am a &#8220;saver&#8221; because your article became part of our building file and, therefore, I had your contact info available for a question that has arisen. Hoping you can offer comments.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Our building contract includes &#8220;Allotments&#8221; for different items in the building process, i.e. kitchen\/bath cabinets and counters, flooring, light fixtures, etc. We understand clearly that if we go over the allotment amount, we are responsible for payment of any additional dollars spent. However, my question is, if we do not meet the allotment amount and spend less, what is supposed to happen to the balance remaining?<\/p>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td style=\"text-align: left;\" width=\"50%\">Our builder informs us that any unused allotment goes back to him and his working capital and does not get credited to us or used for any other purchase we may require. This was not spelled out in the building contract and we assumed that if we did not spend the entire allotment there would be a credit back to us or the funds could be used elsewhere in the project. The contract verbiage only discusses our responsibility should we spend over the allotment amount. What is the standard procedure in this regard? If you could address this question, we would be most grateful.<\/p>\n<p><strong>Answer:<\/strong> N.U., What your building contractor is doing is very common.<\/td>\n<td width=\"3%\"><\/td>\n<td width=\"47%\"><a href=\"http:\/\/homeadditionplus.com\/dev\/home_addition_bid_sheets\/\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-381 aligncenter\" src=\"http:\/\/homeadditionplus.com\/dev\/wp-content\/uploads\/2016\/09\/Home_Addition_Bid_Sheets_Ad_250x250.jpg\" alt=\"Home Addition Bid Sheets\" width=\"250\" height=\"250\" srcset=\"https:\/\/homeadditionplus.com\/dev\/wp-content\/uploads\/2016\/09\/Home_Addition_Bid_Sheets_Ad_250x250.jpg 250w, https:\/\/homeadditionplus.com\/dev\/wp-content\/uploads\/2016\/09\/Home_Addition_Bid_Sheets_Ad_250x250-150x150.jpg 150w\" sizes=\"auto, (max-width: 250px) 100vw, 250px\" \/><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Builders I\u2019ve worked with in the past typically use the word \u201callowance\u201d in their contracts for describing monies set aside for the homeowner to select various building materials such as cabinetry, flooring, and lighting products.<\/p>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td style=\"text-align: left;\" width=\"50%\">The word \u201callotment\u201d, or home building contractor allowances, effectively means the contractor has allowed in his budget for you the homeowner to spend up to X amount of dollars on carpeting, lighting, etc. Usually the contractor specifies a certain amount of money for each allowance type. If you end up spending more than the home building contractor allowance, you owe him. If you spend less than the contractor allowance provided for, then he saved a few dollars. Again, this is a very common practice with home building contractors.<\/p>\n<p>This said, from my personal experience, home building contractor allowances are typically minimal and allow you to only afford the bottom of the line \u201cbuilder grade\u201d material.<\/td>\n<td width=\"3%\"><\/td>\n<td width=\"47%\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1202 aligncenter\" src=\"http:\/\/homeadditionplus.com\/dev\/wp-content\/uploads\/2016\/09\/contractor_hiring_1.jpg\" alt=\"Home Building Contractor Allowances\" width=\"257\" height=\"196\" \/><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Also, the contractor allowance language in a building contract often says the homeowner needs to spend the home building contractor allowance at a specific building materials store, where it just so happens the builder gets a discount. Consequently almost always the homeowner ends up spending more than the contractor allowance provided.<\/p>\n<\/div>\n<p><span style=\"font-size: medium;\"><span style=\"color: #008000; font-size: large;\"><b><span style=\"color: #008000; font-size: large;\">For more help on either hiring a general contractor or acting as your own general contractor<\/span><\/b><\/span><\/span><span style=\"font-size: medium;\">, see HomeAdditionPlus.com&#8217;s<b> <a href=\"http:\/\/homeadditionplus.com\/dev\/home_addition_bid_sheets\/\"><span style=\"color: #0000ff;\">Home Addition Bid Sheets<\/span><\/a><span lang=\"EN\">. <\/span><\/b>Our\u00a0<b><a href=\"http:\/\/homeadditionplus.com\/dev\/home_addition_bid_sheets\/\"><span style=\"color: #0000ff;\">Home Addition Bid Sheets<\/span><\/a> <\/b>provide you with the knowledge and information on how to plan a home building project, and what to look for when hiring contractors. They also include detailed cost breakdown tables and spreadsheets for estimating your own new home construction building costs<\/span>.<\/p>\n<hr \/>\n<h3><span style=\"color: #008000; font-size: large;\">Free Home Addition Price Quotes with No Obligation!<\/span><\/h3>\n<p>Fill out our 3-5 minute quick and easy form, and receive a free price quote on a house addition from one of our prescreened and licensed home addition contractors. This process is free and there is no obligation to continue once you receive your house addition price estimate.<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.inforequests.com\/pub5x\/\/?allowRefNet=N&amp;layout=H&amp;PublisherSubID=Room_Addition_Bottom&amp;url=http:\/\/g.gaesy.com\/cgi\/r?;n=203;c=622397;s=4383;x=7936;f=201006161516140;u=j;z=TIMESTAMP;&amp;servicescheckbox=ROOM_ADDITIONS&amp;submit=submit\" width=\"660\" height=\"560\" frameborder=\"0\" scrolling=\"no\" data-mce-fragment=\"1\"><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Contractor Allowances are Funds Set Aside by the Contractor for the Homeowner to Select Certain Building Materials By Mark J. Donovan Question: Mark, I read with great interest your &#8220;Home Building Contractor Checklist&#8221; article as my husband and I are in the process of starting a home building project and about to sign a contract for same. Thanks to you and your home building checklist article, my husband and I were able to be more educated with what a home building contract should include. I am thankful that I am&hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":315,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-1352","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Home Building Contractor Allowances - HomeAdditionPlus.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/homeadditionplus.com\/dev\/home_articles\/home-building-contractor-allowances\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Home Building Contractor Allowances - HomeAdditionPlus.com\" \/>\n<meta property=\"og:description\" content=\"Contractor Allowances are Funds Set Aside by the Contractor for the Homeowner to Select Certain Building Materials By Mark J. 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