Paying deposit before builder starts working??

leveller2911

Cknocker wrote: »

Don't agree, I have worked bothboth contractor side as a site/project manager and client side as a pqs/project manager - and I work with small 1 man bands as well as large companies.

On contractor side i would never expect it and on client side wold never entertain it, every business at the end of the day should have some working capital.

The fact the materials are paid for at a later date is not a red herring, how can a builder be desperate for money to pay for materials that are not due to be paid for, or is the money to pay for materials from his last job? If so thats a worry in itself.

Find me a standard construction contract that allows for a deposit up front, JCT,NEC and ICE forms certainly don't.

In your previous post you said QUOTE:"Theres no problem in helping the builder with payment for materials",now your saying there is.
Think your getting confused ,Ive been in business for 22 yrs, ive had great customers in general, but you will get those who take the micky and pay you late,had one pay 3 months late, but at least they paid.There are good builders and bad builders ,just the same as customers.

It is NOT unreasonable to ask for 20% up front,I would always say to people only use people who come recomended and not look through advertisments,most good builders etc don't need to advertise in papers etc.
It is only in the building industry where people seem to think its ok to pay the bill 28 days after receiving it , why???. If you get your petrol/diesel from the garage do you pay the following month?? or when you go to the super market do you pay months later???, when building works may run into ££££thousands why is it wrong to ask for a deposit? you would pay a deposit for a new car..What the deposit/material money does is gives the builder the confidence that if the client fails to pay at least the materials is accounted for,its bad enough losing your time labour ,but to also lose materials too is crippling.


Working as a site /project manager do you have to pay thousands out for materials??

You wrote "what happens if the builder goes bust? with regards to material money,what happens if the client goes bust before paying? there is NO difference, someone will lose.

Lastly I have a small joinery workshop, all my work is word of mouth, trust plays a big part and as such have never needed construction contracts .

dander

leveller2911 wrote: »

When building works may run into ££££thousands why is it wrong to ask for a deposit?

I agree with this and I'm a customer not a builder!
Deposits seem to me to be normal practice in so many transactions, cars, curtain-making, furniture etc.. it only seems reasonable to pay a deposit for building as well. It's all business.

I felt that by paying the deposit, the relationship between me and the builder had officially begun - it meant that we've agreed a start date and I now am in a position to complain if they don't turn up as agreed on that day. I also feel that it means it's reasonable for me now to give all their details and contact numbers to Building Control since both I and the builder have agreed we are serious about the project. I was actually really anxious to put some money into his hands to feel I had everything firmly in place. I must be a dream client! :rotfl:

Cknocker

I've never had a contractor ask for money upfront, and I've never had a problem getting contractors paid.

As well as working for a company I carry out freelance project management work for members of the public, large ticket items such as roof trusses I get the client to pay direct, general materials the individual contractors pay for, they are then paid for at intervals agreed, I have found no contractor to date that expects a deposit.

If you're a contractor, I'm afraid thats the nature of the beast, if you don't like the terms of construction contracts, don't call yourself a building coontractor!

As a contract administrator when working under a contract, there is no way on this earth I am going to certificate overpayment for work not done, as at the end of the day I would be liable!

Also I ak not getting confused, when I say I have no problem paying for materials for the contractor, at that point the contractor is effectively working labour only, therfore provides no warranty on the materials I have supplied.

Bottom line is this, if you want a deposit for work you will not be working for me, if you're happy with that, then so am I. I have a lot of damn good contractors that are happy to work for me. And generally the works are done a lot cheaper than a general builder taking the job on.

If as a contractor you want to minimise the risk then agree to shorter payment terms again I have no problem with that.

Cknocker

As a project/site manager, while I do not have to pay for materials, I am accountable for my actions and believe me if I was paying out tens of thousands of pounds for work not complete I would not have a job very long.

missm29

I'm sure trading standards advise never to pay any money upfront, you say the builder is a member of checkatrade, we too are a member of checkatrade and marshalls approved, otherhalf is a paver, can't remember which one it is but when we signed with them the contract states to never ask for money upfront. Its very easy for builders to get merchant accounts at many places, each issuing a very large credit limit, if the builder doesn't have this then i expect they have money problems and this is why they will not have credit accounts. Anything we put on account anytime in July, will need to be paid by the end of August. If the work is going to take several weeks then an interim payment is acceptable, get the company to invoice you and get a receipt, always pay by cheque. Don't let them say i will put one in the post. Builders wanting cash are most likely on the fiddle or having cash flow problems. I hate to be paid cash as i'm the one that has to bank it. Only pay for what work has been completed, regardless of what materials they have purchased, theres no need for them to buy materials so far in advance, most places deliver within 1/2 days.

Many times my partner has had to go and put right or finish work, where the builders have taken money and never finished the job. My parents also had the builders from hell, who kept asking for money every week, never finished the job and the things they did were illegal, cost lots to put right, and turns out the builder was a thug, so they couldn't even pursue him due to fear of him.

Also don't believe everything you read on the checkatrade website, its easy for companies to fill out the feedback cards themselves, we are told to stay with the client when they fill out their card and post it yourself to make sure it gets done, i think this kinda puts the client under pressure to write something nice. We only pay around £500 a year for the checkatrade membership and can ask for any negative comments to be removed, if you get too many negatives then they may cross you off, but how many is too many and at the end of the day they want companies to advertise.

Also ask for recent references, phone them and go and see their work, get the address too to make sure it exists. We always give 6.

ormus

any decent builder would not want or require 20/30% up front. but stage payments are very usual. 30/30/30/ plus 10%.
some small builders may require/state say 10% up front, which i think is fairly reasonable.
but i would only pay on the start date. there has to be some trust both ways.
if you havent checked out your builder first, then you shouldnt really employing him anyways.

roses

I paid 30% deposit prior to works for my loft conversion

Just make sure you check out the references beforehand

Caremore

I know this is an old post but I have stumbled across it.

We are a building company and I will share our payment terms. We are always upfront with our terms before the job has started all prices quoted are EX VAT

1. If the job is under £1000 we don’t ask for any money up front however once the job is complete we expect to be paid Via Cash or Faster Payments. Either way we don’t leave until payment has been made.

2. If the job is between £1000-5000 we always ask for payment on the first day we turn up with materials. For example fascia, soffits and guttering job cost £3000, we would ask for £1200 which would cover the materials but only once we are on site with the gear. Payment on completion is normally 1-3 days.

3. £10000 and over is contracted and payments consist of 4-7 stages depending on the size and length of the project. We don’t work with percentages for the stage and practical completion payments because it is far too risky for both parties. Instead an invoice is raised at said stage and the amount has already been quantified at the contract sign meeting.
Below is an example of 16 week project cost 70K.
Deposit 15%
Stage 1 (Payment at slab level)
Stage 2 (Payment at floor joist level)
Stage 3 (Payment at roof level)
Stage 4 (Payment on completed roof structure and coverings)
Stage 5 (Payment on completed first fix joinery & windows, first fix plumbing & electrics)
Stage 6 (Payment on completion of plastering, second fix joinery & windows, plumbing & electrics)
Practical Completion (Payment on completion of all decoration and snags)
Retention 5% (defects liability period 3 months <100k 6 Months >100k)

There is nothing wrong with asking for money upfront as long as it’s for a genuine reason. A lot of builders are struggling because the market at the moment is very poor and slow moving so the help the good ones out.

As for all the unfortunate people who have ripped off next time do your homework and find out more about your builder. Limited companies can be found at Companies House to confirm details are correct then check, don’t rely on just Companies House. If your builders not on it then they are either a sole trader or partnership, there is no way of confirming there location unless you know where they live.

We don’t advertise anywhere apart from our website, referrals are best but again bloody check!!!!
You’re only as good as your last job!!!!
As for other peeps who posted on here saying builders are supposed to have some form capital or have credit accounts with suppliers SO WHAT! In the first week of an extension is the most costly stage….we spent £8000 on the first day on the 70K job above.


Anyway I could go on forever



Keep Britain Building!

phill99

Caremore wrote: »

I know this is an old post but I have stumbled across it.

We are a building company and I will share our payment terms. We are always upfront with our terms before the job has started all prices quoted are EX VAT

1. If the job is under £1000 we don’t ask for any money up front however once the job is complete we expect to be paid Via Cash or Faster Payments. Either way we don’t leave until payment has been made.

2. If the job is between £1000-5000 we always ask for payment on the first day we turn up with materials. For example fascia, soffits and guttering job cost £3000, we would ask for £1200 which would cover the materials but only once we are on site with the gear. Payment on completion is normally 1-3 days.

3. £10000 and over is contracted and payments consist of 4-7 stages depending on the size and length of the project. We don’t work with percentages for the stage and practical completion payments because it is far too risky for both parties. Instead an invoice is raised at said stage and the amount has already been quantified at the contract sign meeting.
Below is an example of 16 week project cost 70K.
Deposit 15%
Stage 1 (Payment at slab level)
Stage 2 (Payment at floor joist level)
Stage 3 (Payment at roof level)
Stage 4 (Payment on completed roof structure and coverings)
Stage 5 (Payment on completed first fix joinery & windows, first fix plumbing & electrics)
Stage 6 (Payment on completion of plastering, second fix joinery & windows, plumbing & electrics)
Practical Completion (Payment on completion of all decoration and snags)
Retention 5% (defects liability period 3 months <100k 6 Months >100k)

There is nothing wrong with asking for money upfront as long as it’s for a genuine reason. A lot of builders are struggling because the market at the moment is very poor and slow moving so the help the good ones out.

As for all the unfortunate people who have ripped off next time do your homework and find out more about your builder. Limited companies can be found at Companies House to confirm details are correct then check, don’t rely on just Companies House. If your builders not on it then they are either a sole trader or partnership, there is no way of confirming there location unless you know where they live.

We don’t advertise anywhere apart from our website, referrals are best but again bloody check!!!!
You’re only as good as your last job!!!!
As for other peeps who posted on here saying builders are supposed to have some form capital or have credit accounts with suppliers SO WHAT! In the first week of an extension is the most costly stage….we spent £8000 on the first day on the 70K job above.


Anyway I could go on forever



Keep Britain Building!

And your point is what exactly?

vax2002

20% is a lot of money to have vanish.