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?

ExploraDora thank you so much for that, I will school up on Consumer Credit act - this could be the answer to the dilemma!

To answer about previous work, his terms were the same - pay for materials up front and pay the balance once the job is done.

But they were bathrooms, so we are only taking 2 or 3 grand, so didn't register it as a major risk. I think the first one we may have done on credit card, and he swallowed the cost simply because it was more like £60, not £600, which is fair enough...

If he is a decent honest tradesman he will have relationships with suppliers which give him 30 days to pay.

Under no circumstances would I trust any builder/electrician/Plummer who asked for more than a third up front.

Have you seen any kitchens he has done before?

The surcharge is a cost of doing business, his cost of doing business. He might want to try to negotiate it down directly with the card company, always a possibility.

I presume he didn't ask for such a whopping great "deposit" or your bathrooms?! I would not do it - would be too concerned he's about to declare bankruptcy or it's some way of paying off his wife, or paying solicitors' fees for divorce, or something else that might not end well with your money on the line... I would basically avoid unusual behaviour from a businessman going through a divorce with a wife who is also a business partner (but may well not want to be for much longer!!).

Have you considered just paying the credit card surcharge for peace of mind? My perspective might be off because £33,000 is an utterly staggering amount of money to me, but I'm really not intending to sound trite. It just seems that if you've got that massive level of money to invest, another £660 just doesn't seem out of the question?

Does it fit with the level of deposit you've paid in the past? Has he given you a solid reason for it? It seems really high! We've spent the last 4 years in a project of a house. Our biggest job was £50k and we paid 10% up front and an agreed monthly schedule according to outlay for the builder and the progress made on the job.

For that amount of money I'd want protection - perhaps a formal contract could be put in place? Something to talk to him about? I think I'd look at sourcing a contract, revising it and paying a solicitor to approve it/refine it and asking the builder to sign it. That's way too much money to not have any protection for.

By comparison when I had my kitchen done I paid £8k upfront and made staged payments of 3x £12k to make up the balance. The final being on completion.

I've had loads of work done over many houses and never paid such a high proportion upfront - and never would.

As PP have said, he will get credit terms from his suppliers.

If he can order something then so can you. In fact he can order it and you simply pay....

I had a smaller project but my builder ordered stuff, and I then paid for it directly to whoever he had put the order in with ie building merchant.

Every Friday the builder invoiced me for the days he had worked (set daily rate) and I transferred money directly into his bank account.

This included me paying the electrician/plumber/kitchen fitter/plasterer directly too although their work schedule was organised by the builder and I was quoted for their work as part of the whole job ie plasterer X to be paid Y. That way I knew in advance how much the whole job was costing and what portion each sub contractor was charging.

Just because someone has done a job for you doesn't mean something won't go wrong. Get a signed contract. My plumber had to reschedule after his Dad had a heart attack (we knew the Dad so knew this was true) it put his work back by a couple of days but it didn't effect the whole project.

Oh sorry just seen later posts saying the same thing.
I agree it is not the same as having an extension built, more like ordering a bespoke item in a shop.

Like pp suggested just pay part credit card £1 will do the rest bank transfer .

Making a Section 75 claim

There are some limitations to when a card company is liable along with the retailer or trader. The item or service you bought must have cost over £100 and not more than £30,000.
However, to claim under Section 75 you don't have to have paid more than £100 or the full amount on your credit card – the card company is liable even if you made only part of the payment (a deposit, say) on your card.

Is it definitely his business account he wants the money paid into?...

Does a s75 claim even count if you've done something incredibly stupid?! I think paying someone that much upfront is wilfully blind to the ridiculousness of the request.

Tell him you've had other quotes with more favourable terms and you'd prefer him to do the work you want to negotiate the terms of him doing it?

I came on here to say what dora said - I THINK there's a minimum you have to pay by credit card (£100 springs to mind), but it means the rest of the transaction is covered.

I wouldn't like to pay a supplier directly, then you get into arseholery when there is a fault - blame the workman or blame the tools they will both blame each other.

I agree suppliers should have a 30 day invoice to be paid, we had for our Howden's kitchen.

A not entirely related point but if you buy appliances and materials directly and they are duff and cause damage (not just replacement of the appliance as covered by a manufacturers guarantee) you can directly pursue the seller. If he purchases them and the same thing happens your contact is with him and can get messy with insurance especially if it happens before final completion.

In any event I would not be comfortable with that large a sum upfront without some level of protection, even if it is on similar terms or the same percentage of the overall cost of a job.

Pay a deposit on the credit card, iro £200 say, then you still have cover for the full purchase price.

Can't you do a bank transfer to his account?

Can you get insurance for him going bankrupt ?

I'd speak to him about it and explain that you don't want to hand over so much cash all at once. I've not paid any deposits for bigger building work. I've always paid in stages after bits of works and products are onsite.

I'd suggest paying for the kitchen direct. I imagine it counts for a lot of the £22K. I suspect the kitchen company want a lot of the money upfront. They may want all of it which would make the £22k more understandable.

Are you having Leicht cabinets? I have them and I think they are fab.

Is he adding a handling fee to the kitchen order? I like to avoid it by buying in materials myself at least for higher value items.

ExploraDora you win the Internet! I've just found the bit of Section 75 of the Consumer Credit Act that says even if you make a deposit on credit card, you will be compensated the whole amount even if you pay the rest in cash. So I can give him a credit card payment of over £100, the rest up to £22k in cash, and still be covered.

THAT'S A WIN!

AndNowItsSeven I see you have just posted similar - thank you so much. This is what Mumsnet is so great for...collective wisdom!

Regarding the deposit amount - it is exactly the same terms as previous jobs - it's just such a high value job that the materials are such a large component which means it is a large deposit. It's the way he has always operated. Hasn't been a big issue in the past because the jobs have been lower value and therefore lower risk.

It's his business account he wants it in, the very same one we've used in the past.

It's pure speculation about what may or may not be going on with his divorce, what he might use the money for in the meantime, or whatever - which is why I want it to be not really my problem if something were to go wrong. Nothing has ever gone wrong in the past. I've no real reason to think that something will go wrong. And he is a very proud and honourable kind of chap. I've got to know him well over the years.

But good old Consumer Credit Act, the most consumer friendly bit of legislation ever written!

I really wouldn't do this, sorry. When I had my kitchen done I paid weekly instalments directly into the builders bank account. Stage payments, fine, £22k up front? Not fine.

I paid a similar amount last year and had a guessing here 40% up front deposit, may be a bit less, then I made 4 payments throughout the period. I negotiated to hold back more than they wanted for satisfactory completion and they accepted that.

Is there a compromise here that you buy the materials and pay the supplier and that is documented in writing, so if he goes bust or runs of they are your property?