AIBU to think a £22k cash deposit is large and rather risky?

[TattyDevine]

Firstly apologies for talking about financial stuff on here, but it's difficult to do the thread without these details and I need the collective wisdom for this one.

I'm having my kitchen renovated. It's quite a big job which involves taking a couple of walls down and new flooring throughout as well as plenty of cabinets, worktops, appliances etc.

I've had several quotes, and to do it to the spec we want, it's a £33k job including everything including decorating etc.

One of the quotes I had wanted a £1k deposit to secure the commencement date proposed, a further £9k about a month before and then the rest on completion. Presumably to cover the cost of the cabinets, which are coming from Germany, some of them bespoke, and painted to your specifications etc. Obviously this protects the business from being stuck with cabinets they can't return if you change your mind or something like that - fair enough. More relevantly, they take cash, bank transfer, or credit card. Being aware that if you make a payment on a credit card for goods that don't come to be, you are covered under the consumer credit act. So no major risk to the consumer if for instance the company were to go into receivership or liquidation before your job was to start.

But the one I want to use total cost is also £33k, but wants a £22k deposit (which covers the cost of all materials) and then the rest on completion. He wants the deposit in cash.

I really want to use this guy, he's done 3 of my bathrooms in the past, I really like him, trust him and his staff being in my home and all that, the quality of his work is great, it runs like clockwork and he project manages every aspect from start to finish. His quote, whilst the same price as the other quotes I have, also includes enough extras to make it really enticing.

But £22k up front is a risk whichever way you look at it. And I would question why he should need the whole amount of materials up front...doesn't he have credit terms with suppliers on appliances at least? I get that some of it is bespoke and coming from Germany and could be a risk to him.

Does anyone have any opinions on this? Would you do it/risk it? Have you done it? Have you had a job like this done but not had to pay such a big deposit, do you have a business that does jobs like this and also ask for this deposit, in fact any views or opinions on this would be welcome.

At this point it's making me feel I should go with the other company with a £10k deposit on a credit card with no risk but I actually really want to use this guy... AIBU?

[LaurieFairyCake]

He's done 3 bathrooms of yours. You like and trust him and everything runs like clockwork?

Sounds perfect. Maybe he doesn't take business risks or buy supplies on tick?

[TattyDevine]

Just to clarify, when I say he wants it in cash, I mean by bank transfer, not peeling off notes in his office. But you still aren't protected for that I don't think...

[WonderingAspie]

Hmm, I'd be wary, that's a lot of money. Why won't he take a credit card? He still gets paid.

[dropdeadfreddie]

if you transfer the money using paypal with your credit card are you still protected under section 75?

[dropdeadfreddie]

and no way would i give one person that much money with no protection.
another possibility, is it possible for you to pay the companies direct for the appliances?

[TattyDevine]

He doesn't want to take a credit card due to the 3% surcharge.

I do understand that, because I don't really want to cover the £660 cost of using a credit card either...

[GloGirl]

I wouldn't like it but I would do it for someone I trusted.

[TattyDevine]

dropdeadfreddie he does have Paypal but as a business user he would also incur a charge, of a fairly similar amount. I did ask him about that because I thought it might potentially be a solution where everyone is happy...

[writingonthewall]

No way. We had our loft done recently. Builder billed us in arrears every month for materials and labour used. no way would we have put down 2/3 as a deposit!

[Quodlibet]

He wants the bulk of it in this tax year, maybe?

[donajimena]

God no don't do it. I know a man who did this (they had previously used the builder and been happy) he lost 18,000 pounds. I speak as someone who often has to cover upfront costs and materials and if they are too much (either I don't have it or I run the risk of not getting paid - it works both ways) I ask customers to pay suppliers directly and we will just charge for fitting

[copperpipes]

oh god, what a dilemma.

what did he want as a deposit the previous times you used him? (sorry if ive missed that).

all i can say is if you can find someone who installs well and provides a good finish and standard of fitting, makes an effort etc, then they are worth their weight in gold.

[AndersArms]

OP can you offer to split the surcharge?

I guess the alternative would be to have him open a special customer bank account for you to deposit the funds in, on terms that it can only be released by joint agreement. That way it doesn't go into his general trading account, but is rather held on trust for a specific purpose i.e. The purchase of the materials and his own labour costs at pre-agreed stages.

There is no way I would hand over £22k without making some arrangement to protect it.

[traviata]

no, you do not get s75 protection if you pay via Paypal.

Don't risk it. Even if he is Mr Marvellous when it comes to the work, it is always possible that he is closer to bankruptcy than it appears.

[antimatter]

To mevit sounds as if he is a new customer to his suppliers and they want everything paid in advance before building customised cabinets.
Has he done any kitchens in the past?

Doing up bathroom ia a different kettle of fish from your kitchen.

I've had both done and coukd see how much more complex kitchens are.

[TJEckleburg]

Can you not arrange to pay for the cabinets and other major stuff direct? If you search places like Appliances online and competitors for the appliances you might even be able to get them significantly cheaper. I cut over 5k off the original companies cost of my appliances just by buying them direct from online retailers and searching for best deals - I even got AO to price match some of their competitors

[Zampa]

I have just paid a supplier up front for materials (saw quotes) and 20% of labour costs up front. We'll then do staged payments throughout contract with final 25% payable on completion.

I'm happy to pay cash (bank transfer) but I wouldn't pay two thirds up front.

Can you negotiate smaller payments in more frequent instalments?

[AveEldon]

Why can't you order the kitchen units yourself direct? Surely that would reduce your risk?

[TattyDevine]

I don't think paying the suppliers directly is an option. Lots of different suppliers, some of them distributors, etc. There has to be a better way! But perhaps there is not.

It is a real dilemma. I've no reason to think he's about to go broke - he's busy, his business has expanded over the years, etc.

But he is going through a divorce. They don't own property together, she seems to be a director of the company so technically a co-owner, or shareholder, or whatever - and it's been a long marriage and she is a fully entitled wife legally to walk away with something. I'm speculating a bit there. But it is in the back of my mind! Sorry if that's a drip feed.

[shazzarooney99]

In the past how much has the work cost? and how much deposit have you given him? if you trust him i would do it, however its a lot of money upfront.

[maydancer]

Could you pay direct to the German cabinet maker with credit card?

[ExploraDora]

Someone more knowledgeable will hopefully be able to confirm this, but I believe that if you pay a deposit by credit card then you will be covered for the full transaction by the credit card., even if the rest is paid for by cash/bank transfer etc (Section 75 legislation, I think). So he could invoice you for a small deposit and you pay by credit card for that and then you pay by bank transfer for the rest.

Please do check - this was explained to me by an employee of my credit card company when I paid £100 by credit card, then £900 bank transfer for some wedding decorations which didn't show up! I was covered by section 75 then, to my great relief!

[AnotherTimeMaybe]

I wouldn't give that much money and we've done loads of work in our house over the years we never had to give that percentage upfront. We actually didn't give any deposit for labour just whatever was needed to order material. Then we would pay in instalments so that the staff would have paid regularly rather than just at the end

I'd really look into what dropdead suggested but bear in mind you or your builder would have to pay a fee

Final option look for someone else. There are websites out there with genuine feedback

[YellowTulips]

It's a bad idea.

If it's a cash flow issue for him re:buying the materials I would offer that you pay the supplier in each case directly.

This way you spread the risk amongst multiple suppliers (and also the timing - you won't need to buy everything at once) but he can still do the fitting.

If he says no to this arrangement then walk away. It's a huge red flag that's he's using your deposit for something other than sourcing materials.

[EweAreHere]

No. No way.

It's too much money to not have protected in some manner.

Even the greatest previous experience in the world with him doesn't mean there might be issues now.

Credit card is a perfectly reasonable way to pay a business person. This is a red flag to me.