Deposit requested for a 2-storey side extension

pezza1972

Hi,

We are about to have work started on an extension.  We have been given a price of £89k.  This is in the North West area of England.

The builders have requested a deposit of £25k.

For me, this sounds steep at just under 30%.  

I am wondering whether this is the norm these days or whether this is over the top.  I was thinking about 10% max, but I am just a client with no real experience on this :-)

LightFlare

25k is probably the cost of materials

Ask them 

Doozergirl

I really don't think that's okay.  

But let's give them the benefit of the doubt.  When is work starting?  How long before the work starting are you required to pay the deposit? 

What do they say the deposit is for? 

Have they produced a contract?  What kind of contract is it? 

What do stage payments look like after the deposit is paid? 

Where did you find the builder and what due diligence have you done on them?  Are they a member of the FMB, for example, and have been properly vetted and inspected?  

comeandgo

Absolutely not ok.  I have never paid up front for work to be done.  Is your builder a Ltd company?  Have you had a look at their accounts on Companies House?  How did you find these builders?  Are you just using them or do you have other trades coming in like electrician?  Who is controlling such a large project?

Albermarle

comeandgo said:

Absolutely not ok.  I have never paid up front for work to be done.  Is your builder a Ltd company?  Have you had a look at their accounts on Companies House?  How did you find these builders?  Are you just using them or do you have other trades coming in like electrician?  Who is controlling such a large project?

When we had a loft conversion, my compromise was to pay the first tranche once they turned up/got started.

tacpot12

Have you looked at an ESCROW service?

sheenas

It not a bad amount, but I would be looking for a payment schedule to reduce the risk. 

gzoom

comeandgo said:

Absolutely not ok.  I have never paid up front for work to be done.  Is your builder a Ltd company?  Have you had a look at their accounts on Companies House?  How did you find these builders?  Are you just using them or do you have other trades coming in like electrician?  Who is controlling such a large project?

We've have now interacted with a whole host of different trades now. 90% don't ask for any money untill the work is done and even than I end up having to chase them. The few trades we paid up front has always been where there is clearly a lot of materials to order in, like glazing. 

pezza1972

Thanks everyone.  The work is likely going to start tomorrow.  So it isn't up front of the work starting, it is up front of the work being completed, and so what concerns me is they turn up, take the £25k and then don't come back.

The builders are locally recommended.

comeandgo said:
[...] Are you just using them or do you have other trades coming in like electrician?  Who is controlling such a large project?

They are more project managing it and getting the other trades, so they will be controlling it.  

With regards to the payment schedule, this will be agreed but part of this is DFG (Disability Funding Grant) so the rest of the staged payments will also have to align with that, which they know.  I just thought that as an initial payment, ~30% was steep.  Maybe given they are project managing it all as well (although I am looking to seek some sort of snagging also) then this may explain why it is so high

pezza1972

tacpot12 said:

Have you looked at an ESCROW service?

I haven't to be honest.  Was considering snagging regarding quality but never thought about this.  Although might be a bit late in the day now.  We can delay it, but we are also wanting things to get moving as (bit of a long story) but it has taken us 6 years so far to get past all the council red tape.

Still, I will look in to it

pezza1972

Albermarle said:

comeandgo said:

Absolutely not ok.  I have never paid up front for work to be done.  Is your builder a Ltd company?  Have you had a look at their accounts on Companies House?  How did you find these builders?  Are you just using them or do you have other trades coming in like electrician?  Who is controlling such a large project?

When we had a loft conversion, my compromise was to pay the first tranche once they turned up/got started.

Yeah, that is kind of what they are doing...when they turn up to "start".  I just thought 30% was a lot and I have seen other blogs saying it should NEVER be over 15%, but maybe that is people asking for deposits BEFORE the work has or is starting