Advice on booking in a building project

webflipper

Hi all 
I would be super grateful for any advice/tips based on your experiences of initiating mid-to-large scale renovation projects..

A little background: after saving up the pennies over a number of years I'm now in the position to be able to start a downstairs/kitchen renovation project, and I can confidently say this is the biggest (in size and cost) job I'll have done to my house since buying it!
The work consists of knocking down a wall between two rooms, installation of RSJ, converting a door to a window, electrical work, installing a new kitchen replacing flooring.

After organising multiple quotes and plenty of due diligence I have found a contractor I feel confident about to complete the work, my question relates to the contractors payment schedule, which consists of a 25% advance down payment to book in the job with the contractor, with the remaining balance then paid weekly when agreed milestones are reached (or adjusted in the event of unforeseen delays).

My question for you is whether it's common to pay an advance down payment which would be a pretty sizeable amount? I can completely understand from their perspective they need to be sure the customer is fully committed to the project and wont flake out at the last minute, for me though even 5/10% in this instance would be in the thousands and an amount of money I would not be willing to walk away from. So my concern is losing the down payment if something unexpected were to happen like the contractor folding (I've heard a story from family of this happening recently).

I understand that if I pay even a portion of the cost by credit card this should protect me under section 75 if anything untoward happened, but if it's not possible to pay by credit card, would there be any other way of protecting myself from potentially losing a sizeable amount of money, or would you suggest asking if they would accept a lower % down payment?

Or alternatively, am I just worrying too much about this? 

Thanks in advance for any advice/opinions!

grumbler

Personally, I'd never pay 25% for 'booking', i.e. for nothing.

comeandgo

Never should be any need to pay up front.  A contractor will have credit accounts with builders merchants, any asking for payment prior to starting should be avoided.

Doozergirl

Not reasonable at all!  25 % upfront with weekly payments keeps you permanently behind the curve.  

No.    We've never taken a down payment on a big project and never had a customer flake out.  Any deposit should be a token, unless there's a bespoke product involved.  

cattom

no is the answer. what usually happens is, when hes about a 1/3 of the way through, he may ask for money to buy more materials, supplys etc. 2/3 of the way through, and then the rest at the very end. that way you can see how the work is going, and you can also see what kind of builder he is. 
do not part with money up front.

Rosa_Damascena

I paid 12.5% at the outset (which is a hefty wedge in sterling) the day the work started to cover initial costs which involved a lot of equipment hire and man hours digging out foundations, then another 12.5% to cover materials. We're 1/3 of the way in and I'm 25% paid up, next payment due imminently which is about on track. That's just for the build, not paying for any of the glazing etc until its installed. Other fittings yet to be finalised.

BUT I would qualify this by saying I used this builder quite a bit before embarking on this current project, and trust his team. So far I've not been let down.

The situation described sounds very odd - 25% is far too much.

ka7e

Agree 25% is too much. 2 points I've heard from builders recently - 1. Some suppliers have cut their credit to even reputable builders. 2. Prices and quotes are often being given with only a 30-day guarantee, then they may be revised. Shortages and high demand means many materials are rising in price on a weekly basis

Rdwill

If the invoice is over £30k then section 75 won't help you.