Construction: "General Contractor Proper Payment Procedure"

When dealing with private funding for a construction project, it is extremely important that you follow the lien law procedures prior to releasing any money to the general contractor or subcontractors. Failure to do so may result in you having to pay more than the agreed to contract price. Prior to receiving any payment, the general contractor should submit to the architect a payment application with a schedule of values. The architect should then conduct a thorough inspection of the items identified in the payment application and schedule of values. The architect must then report to the owner whether the work has been properly completed and what amount should be released to the general contractor. The general contractor must provide the owner with releases through the date of payment from the general contractor and all the subcontractors and material suppliers that have been involved in the project. Only then will payments made be considered proper payments and the owner is protected from paying more than the contract price.