50% up front for building work?

[Littlepicklehead]

Just wondered what the consensus was on this.

We've had a few quotes for building works. One builder said never to pay anything up front, and they would want six equal payments, the first to be made after the foundations are dug (I think) and the last after the snagging list is complete.

We've had another builder who is a personal recommendation, very local and seems to have good reputation. He wants 50% up front, then staged payments but didn't specify how much we would retain until after snagging.

DH is uncomfortable about putting so much cash forward. I've researched and 20% seems to be a more common down payment.

Interested to see the MN general consensus on this...

Thanks Mary Shelley that's really helpful as I'd never heard of that contract before.

How does it work, would the builders usually use this kind of contract as standard, or should we negotiate it with then in advance?

What is a reasonable downpayment?

No way. Staged payments.

Another vote for absolutely not.

I paid my builder for his labour, he invoiced me for the weeks work, I paid him directly into his bank account.

He would order all the goods needed for the following week/next day with the builders merchant, I would then ring the builders merchant and pay for the goods and they would deliver them that afternoon.

It makes me very scared that someone requires that amount of money up front.

I paid the guy directly who dug my footings, all subcontractors were through the builder but I paid for work that was done not for promised work.

His point was that we could fail to pay him, rather than he needs the money up front. Seems unlikely as we wouldn't exactly want a job not finished, but I guess there must be cases of builders doing work and not getting paid?

We are mid-way through an extension and have a contract with staged payments, invoice dates and amounts built in.

Our builder made it clear that if they fall behind their schedule (of which we have a copy), then the stage payments will pause and if they get ahead then we are happy to bring them forward. Our last payment is due after snagging is complete.

We've had some extras along the way and have paid for them as we go but the bulk of the expenditure is in accordance with the contract. We are most comfortable with this and both sides trust each other.

I wouldn't be happy to pay so much up front. Do you have a contract which clarifies what happens if the builder is for some reason unable to complete the work? After all, he'd have a lot of your money.

We haven't appointed a builder yet so don't know about the contract but this would be something to ask.

I'm swaying towards the builder who immediately suggested staged payments and nothing up front. Ill talk to him about the contract and see if he's happy to use the one suggested.

Seems DH was right to by uncomfortable with 50%!

My DH is a builder, it should be staged payments throughout the job, he tends to do monthly valuations and they are agreed by the architect.

The only reason a builder would want money upfront is because they have no credit accounts with suppliers. I guess the only exception might be if the payment was for something bespoke, then I could understand the need for it being paid in advance.

When we were looking into having an extension built, we were advised never to pay upfront as it was a 'red flag' for a builder with poor cash-flow/credit issues, and possibly unreliable. Staged payments should be fine. We actually didn't pay a penny until we got the final invoice on completion (but were kept up to date re costs along the way).