Beware of "flat rate" contractors

Been a while since I've blogged here. Partly I guess because after a year of turmoil things finally started stabilizing, and I guess I wanted a break from active landlording for a while.

But yesterday I had an experience that I feel compelled to write about. For the second time I've had an experience with a contractor who uses a "flat rate" fee structure. For the uninitiated, this is a company that creates general groupings of repairs into one price, so 4 or 5 repairs might all cost the same amount, regardless of how long it actually takes to do the repairs.

These companies promote this as good for the customer - if it takes longer to do the job, you pay the same amount. But don't be fooled, these companies have no intention of losing money, and so if the job does go longer, then they will make the claim that the extended work included a repair that didn't fit into the first category, and so they will have to charge you separately for that too.

This is exactly what happened the first time I used such a contractor. I was having electrical problems, and the guy showed me on their price sheet that diagnosis was going to cost $x (can't remember the exact amount). Ok fine. After some searching they found the source of the problem at a junction box. Rewiring would cost $x. Ok, go ahead. When all was said and done though, three more things slipped into the price.

So yesterday I needed a plumber out because the radiator in one of the bathrooms was no longer producing heat. "Air locked" I had been told by my heating company, but this radiator didn't have a vent. So I was going to need to have someone install a vent. I contacted a company that agreed to come out for a $69 diagnosis charge, which could be applied to the repair. No mention of flat rate pricing. The guy arrived, looked at it and determined that he could install a new elbow with vent, but he would have to drain the whole system first. This was when they sprung the "flat rate" pricing on me. The flat rate for draining the system would be $388 (not sure how they arrive at these prices). BUT the flat rate for installing the elbow would be an additional $306!

$306? To install a little elbow in a very accessible location? He gave me the speech about "doing it right" (every time someone charges a ridiculous amount they use this line, even if they have no clue what "doing it right" really means). When pressed, he said installing that elbow, after the system had been drained, would take about an hour. So basically $300 an hour to do the job. He countered that if he runs into problems and it took longer I wouldn't have to pay more. In this case, even a novice plumber should be able to do this job in 2 hours. When I told him that flat rate pricing really only benefits the contractor and not the customer, his response was "why shouldn't it?"

Anyway, if a company uses this approach, my advice is to stay away.