Explaining the Roles and Responsibilities of General Contractor and Subcontractor in Modular Home Construction

When dealing with modular home construction, you enter the realm of general contractor and subcontractor. But what’s the difference between the roles and responsibilities of a general contractor and subcontractor?

General Contractor versus Subcontractor

General contractor is someone who has a contract directly with the owner of the property of a project, or with someone “knowingly permitted” by the owner to improve the project. He is the “big picture” thinker. They work with you through the entire project, from the idea phase to the finished product. General contractors are more like managers and coordinators, but many have a crew of their own and perform some of the subcontract tasks.

By contrast, a subcontractor comes and goes. Subcontractor is someone hired by the general contractor, rather than the owner, or the owner’s agent. They specialize in certain areas of the construction process, like large equipment operation, concrete formulation, plumbing, electricity and carpentry. They enter a project to do a particular task and leave when that task is finished. The subcontractors are responsible for specific trades, most are the minor program from the overall project. Thus, the agreement to do the work is never made directly between the subcontractor and the owner.

Fees of General Contractor versus Subcontractor

By law, the subcontractor will be paid only if the general contractor is first paid by the owner, whereas under a “pay-when-paid” provision, the subcontractor will be paid when the contractor is paid by the owner. A pay-if-paid provision creates a condition precedent to the contractor’s duty to pay its subcontractor and the risk of an owner’s non-payment is shared by the contractor and the subcontractor. With a pay-when-paid clause, the general contractor has a duty to pay the subcontractor whether or not the contractor receives payment from the owner, and payment will be due the subcontractor within a reasonable time after the owner should have paid the contractor.

Employees of General Contractor versus Subcontractor

If you decide to hire a general contractor, he or she may have a permanent staff of employees. In this case, you might have few, if any, subcontractors involved in your project. Hiring employees versus subcontractors is an economic decision. The employer — in this case, the general contractor — must pay salaries and purchase worker’s compensation insurance for employees.

Since subcontractors are independent business people, general contractors don’t have to pay to insure them or pay employment taxes on them. Hiring subcontractors for overflow work or to perform tasks that call for expertise that isn’t needed on a regular basis saves expenses for the general contractor and ultimately, for you.

In case you still have question about modular homes, you may contact Legendary Homes Inc in Jackson, Michigan. A representative will be happy to assist you. Meanwhile you can check our modular home price sheets by signing up to our blog

Topic: General Contractor

Explaining the Roles and Responsibilities of General Contractor and Subcontractor in Modular Home Construction