how far in advance should deposit be paid

jazzmann

can anyone tell how far in advance of work commencing (central heating installation) should I be expected to pay a 10% deposit - 3 months, 2 months, 1 month?

If it's a cheque then I realise it needs to clear, but is holding a deposit in their own account for four months before starting work a bit over the top?

thank you

keystone

jazzmann wrote: »

If it's a cheque then I realise it needs to clear, but is holding a deposit in their own account for four months before starting work a bit over the top?

Totally on principal but if its in the contract it depends how much it is. If its a tenner then its not worth worring about if its a couple of grand then thats quite a different issue. You are supporting their cashflow which is not your problem.

Did you get other quotes for this work? What are their payment terms in respect of deposit?

Cheers

Edit: When I say "totally" I mean "totally over the top" of course - just in case the duty pedant turns up.

booty40uk

It depends entirely on what your contract says.

Personally, I wouldn't pay anything until either the work starts or there are materials on site.

HTH

Andy

iamcornholio

If this is for a one-man band and he needs the deposit to help with the initial material costs then ask him - he may need it to buy the stuff a few days before the work starts, or he may be able to buy it and then you give him the deposit when he first turns up on site.

If a bigger company, then they should not really need the deposit to buy stuff, and its more of a gesture of commitment - so again see what they want.

Ideally you don't want to be paying large sums of money weeks before the work starts on site. If at all possible hand over any deposit when they turn up and drop materials off - then at least you have something if the company goes under

latecomer

I very much doubt any tradesman worth his salt doesn't have a trade credit account with thier suppliers and hence no deposit for the materials should be required. they may want a deposit to make sure you go ahead with the work but thats up to you if you want to pay. I'd ask why they need a deposit and certainly wouldn't pay anything 4 months in advance.

actually thats another question - why are you waiitng 4 months for a central heating system installation? Are they well recommended and hence you want to wait for or something else?

phill99

latecomer wrote: »

I very much doubt any tradesman worth his salt doesn't have a trade credit account with thier suppliers and hence no deposit for the materials should be required.

What an arrogant ignoramus you really are.

I'm sure most tradesmen who contribute to this site will be highly offended by your remarks. Its evident that you do not run a business and never have done.

These are exceedingly difficult trading times at the moment. Many tradesmen have credit accounts, me included. But why should I buy something on my account without knowing that I will get my money from the customer. If this is a customer who you have worked for before, then most of us will offer some form of credit. But for a new customer, no way. If a job requires a lot of materials, then I'm sorry, but I want a deposit plus staged payment. I don't know your financial situation, and I don't want to be out of pocket. Even if suppliers take material back, many often charge a restocking fee which can often be 20 - 30%. So I will still be out of pocket.

On large jobs with a high outlay, I always ask for a deposit and have not once lost a job as a result. Provided receipts are issued which clearly show your contact details, then ther should be no problems.

latecomer

phill99 wrote: »

But why should I buy something on my account without knowing that I will get my money from the customer.

I don't know your financial situation, and I don't want to be out of pocket.

And why do you not think that the reverse is not true? Why should I pay money before work starts when there is no guarantee that the work will be done. The building trade in general has a well deserved reputation which makes the public cautious.

I pay you a large deposit and then you stop trading and start up tomorrow with another name. Given the difficult trading conditions its probably even more likely than it ever has been before, and by many who are geniunely caught out rather than those normally assocaited with this practice. Happens all the time and thats why the reputation is what it is.

phill99 wrote: »

What an arrogant ignoramus you really are.

BTW you know nothing about me so until I personally insult you I'd ask that you keep the personal insults to yourself.

Innys

latecomer wrote: »

And why do you not think that the reverse is not true? Why should I pay money before work starts when there is no guarantee that the work will be done. The building trade in general has a well deserved reputation which makes the public cautious.

I pay you a large deposit and then you stop trading and start up tomorrow with another name. Given the difficult trading conditions its probably even more likely than it ever has been before, and by many who are geniunely caught out rather than those normally assocaited with this practice. Happens all the time and thats why the reputation is what it is.



BTW you know nothing about me so until I personally insult you I'd ask that you keep the personal insults to yourself.

I'd have to agree with this. I am looking at getting some substantial building work done next year (around 100k) and any builder who asks for more than 10% up front is not going to get my custom.

I intend to minimise my exposure by, where possible, buying the materials myself but I understand this may not always be practical.

keystone

There are more and more instances of "rogue customers" out there who will accept your quotation and nickle and dime the final invoice or fail to pay for works completed on spurious grounds let alone those who fail to pay altogether. I got knocked last year for several £ks worth of work by a client who suddenly disappeared and wound up his company. I got b......r all from the adminstrators.

There is risk on BOTH sides in any transaction of this sort and its not all a one way street by any means.

Buying materials yourself doesn't do anything for you whatsoever. Actually it increases your risk.

So what is the balanced solution?

Cheers

LandyAndy

When we had a new bathroom (total cost £10k - so not insubstantial) the bathroom company wanted 30% with order and 70% on commencement.

We finally agreed on 40% on delivery of all materials to site, 50% on satisfactory completion of works, 7.5 % one week after that and 2.5% a further 4 weeks later.

The value of monies paid really needs to run behind the value of work done / materials supplied.

keystone

The expression I like to use is measurable milestones of achievement. Payment is on those milestones and I'm sure thats what you mean when you say "run behind". If running behind means weeks or even months later then thats not correct.

I think 30% deposit and 70% on starting work is taking the pi$$ and you were wise to renegotiate. However, unless there was sufficient margin in the job your eventual payment profile might have harmed your contractors finances if he didn't allow for that in his project cash flow analysis if he didn't include a retention when he did the original quote.

Cheers