Best Practice Advice for paying deposits/money up front to builders

Kailua

Hello,

I wonder if someone can point me to best practice advice for paying deposits or money up front when having building work done on your home. I am sure I watched a programme the other week where someone said that you should never give builders money up front (eg 20% of the job). I can't find the right section on MSE to look to see if Martin has pulled advice together for this issue.

We have a little bedroom with a slanting roof and windows that do not open. We would like to have the slanted roof removed and new windows put in to make this a proper bedroom with decent ceiling height rather than a junk room. We have obtained three written quotes so far. Two came in around the same amount c£5k and the other one was c£7k (haven't got the paperwork with me at the moment). We have decided to go with one of the £5k quotes as we have seen examples of his work in an extension locally. He initially wanted 20% upfront which I was wary about so now he is saying as the work will take four weeks we pay weekly as the work is done. This is to ensure he gets his money as there is always the risk, he feels, that clients might not pay? The problem is that you see so many horror stories on the tv and we have had some very bad experiences in the past where we have ended up paying out a lot of money so this time I want to make sure we follow best practice. We just want someone reliable that we can trust and that will do a good job.

So does anyone have any links to best practice that could guide us on this. We really need to get the work done but I always put things off as usually getting workmen in ends up being really distressing and the jobs often end up being worse than what they originally were?

Here's hoping.

Kailua

missile

A good tradesman will not require payment in advance. I would look elsewhere, get recommendations from friends and neighbours. The cheapest quote is often the one to avoid.

System

is the money up front for materials? you would normally expect to have to put something up front to get the job kicked off, if they want to get paid in installments that's fine, just make sure the last payment is held back until everything is finished to your satisfaction

are the jobs you've seen from friends/neighbours?

leveller2911

missile wrote: »

A good tradesman will not require payment in advance. I would look elsewhere, get recommendations from friends and neighbours. The cheapest quote is often the one to avoid.

Depends on the type of work, for instance if I were to buy materials from the local builders merchants and the work didn't go ahead I could return them (returns fee payable so small loss) but if I'm making bespoke windows or doors and spend £thousands on materials and the customer changed their minds what to I do with the windows?..... They won't fit anywhere else..

Sorry but I don't agree.......I know plenty of good tradesmen who have never received a penny for the work they carried out.
If they can at least cover the costs of materials by way of deposit the loss isn't 100%.....

It works both ways ...........;)

A deposit for materials is common practice , just make sure you don't give cash and get a receipt.....

Dippypud

Agree a 'contract' in writing, for benchmark targets.

Make sure that all the building permits and permissions are in place, any skip hire stuff is sorted.

Ask at your local council building inspectors and trading standards, they are very approachable and would rather answer questions before it goes pear-shaped.

phill99

I am a tradesman and since the recession started, I regularly ask for deposits on large jobs from new customers. The reasons for this are varied: since the recession started, cash flow for all small businesses is not like it was and laying out for alot of materials up front has an impact on that cash flow. I have only lost one job in the last 2 years as a result of this policy.

Granted, many tradesmen (me included) have accounts at suppliers. But the problem with that is that if I put all materials for a job onto my account at a suppliers, do the job and then have trouble getting paid, then I still have to pay the suppliers account. Therefore, if I take a deposit and buy materials with that sum, then if there is a problem with payment, then its only the labour element that I have to recover.

I'm even happy for a customer to accompany me to my suppliers, pay for the materials directly so that they become his property and I then just install.

This thing about 'if a trawdesman is decent he will not need any money up front' is absolute bullsh*t now. Ther are horror stories of bad tradesmen, but most tradesmen just want to do a decent job, get paid and get repeat work / recommendations. Also remember that there are horror stories about customers too.

If he wants a deposit, then there are some safeguards:

Ensure you have a land line phone number and his address. If he gives you just a mobile and no address, then don't use him.
Ask for references - decent tradesman will be happy to provide these.
If he runs a limited company -check it out at Companies House.
Ask for a contract / specification.
Ask for a receipt.
Pay by cheque / bank transfer - if he asks for cash only, then don't deal with him.

Kailua

Thank you so much for the responses. Feel much better now. Will discuss with the rest of the family and sort out a way forward based on the advice given. Any other comments welcome too though.

Thanks to all for taking the time, it is very appreciated.

Best Wishes
Kailua

muskoka

I've never paid my builder a deposit & have used him a few times and I always pay him stage payments - he puts in the written quote at what stage he requires payment i.e.

20% up to dpc
25% when roof tiles on
25% I dunno when rendered
30% on completion

along those lines anyway

I also ALWAYS ask for a copy of his Insurance Cert (just in case something goes wrong).

27col

For a £7k job it would not be unreasonable for the tradesman to ask for and to receive stage payments. As has been suggested already, keep back some money until the job has been finished and snagged to your satisfaction. I suspect that tradesmen are more worried by the prospect of not getting paid than the customer is, of not getting the job finished. There needs to be a degree of mutual trust in these transactions.

DaftyDuck

20% up front doesn't seem unreasonable to me - nor does staggering payments week-by-week (which is a good way of keeping him working). When I've used a new workman that's relatively unknown to me, I've tended to wait until they've turned up & started before parting with too much money. This is the kind of job he could buy material for, only for you to turn round and say "sorry, changed me mind". You both have to give & take. Possibly, if you opt to use a large firm, you'd expect them to carry all the costs until completion - but get a larger bill at the end.

If he's happy with the week-by week payment, I'd go with that and be pleased!

DVardysShadow

Make stage payments if you need to. On a large job, this is fair. But never let the money go ahead of the work. If it does, then this is a point at which the tradesman can make more profit by stopping work than by completing it. So if you can get him to work past that point, he is demotivated.

Most good tradesmen are happy to keep the work ahead of the payments, so this should not be an issue.