Builder wants 40% deposit?

[stanski]

Total works will be about 60k. Doesn't start til middle of summer. They are asking for 40% deposit which is unheard of. The rest to be divided into stages.

How much did you pay, if any?

We paid 30% but our total bill was only £2000.

If it was a smaller amount I wouldn't be as worried, but it's about 24k and I'm not overly comfortable with this months before the work has even started. What if they went bust?!

None. Pay none, please.

You should be on a minor works contract and pay in stages AFTER the work is done. I.e pay for the plumbing 67% and the plaster 35% and the electric 5% at the end of eg week 3. It is called a valuation.

Your builders are completely scamming you. They KNOW this is not how it is done. Who is advising you?

Actually persona after the umpteenth client going bust, overspending, and generally just taking forever to pay despite the lack of a Payless Notice lots of construction firms are asking to be paid an amount up front on a pro forma.

We will run a credit check Nd if it’s someone we’ve never worked for before, or a domestic client, it’s 50% up front or nothing.

We paid in 4 stages. Our total build was £100k, we paid the first 30k when the foundations had been put in, this was 3 weeks into the build. The other 2 £30k bills were spread across the build with the final £10k as snagging which was paid 3 months after completion.

Then nothing. You should be looking for an early first valuation.

OP, reputable builders can/do/should run lines of credit with the merchants and suppliers. There is no reason for needing £££ in their account at this stage.

And don’t be bullshitted. It’s a matter of law. Please get proper advice from an architect or QS. £60k is a lot of money, do not hand it over without the appropriate contract in place. (I think the contract itself JCT Minor Works or equivalent in Scotland is about £40.)

Every man in my family except my dad own their own construction business. Generally the most asked for upfront would only ever be 30% I believe thats the legal percentage. Being paid in stages if work is progressing as it should is fine. With a final percentage held back as retention once happy after completion.

I also work for a very large company in accounts. We only ask for 30 percent upfront also. And we wouldn't ask this far in advance generally. We may ask a small amount to hold the date.

I personally wouldn't pay 40 percent now for a job in summer. I wouldn't do anything without a water tight contract in place, which id have looked over quickly by our lawyer for that amount. That should have written in it payment terms such as x amount weekly paid via bags or x amount paid once x is complete, then x amount once x is complete. Id also ensure they had lots of genuine decent reviews. Then you stick to the payment terms and DO NOT give more if they say they need it for this or that.. I'd also let them know I was getting the contract checked by my lawyer. Any legit builder won't care.

Our planning department at the council has a list of approved contractors they will recommend. I'd check with yours too and also check he has never been reported to trading standards.

@Comefromaway that's madness. 50 percent is despicable bearing in mind most deposits are non refundable if the customer changes their mind? And legally binding.

People tend to pay the first and second valuations on time it’s from then on they realise they’ve run out of money.

It’s not law to have to use a JCT contract.

w don’t actually work direct for domestic clients any more, only businesses. Too much hassle.

We’ve got a beauty salon at the moment. Let the interior designers run away with themselves. They owe us £40k. They owe the main contractor over 100k - that’s for 2 months work.

We’ve got a builder desperate for us to stRt a £40k job. His company is only 2 years old. Only filed one set of accounts. Too big a risk. He can’t pay pro forma so we’ve turned it down.

We’ve even got an NHS trust refusing to pay a retention because one partnership trust lost the site and another took over and both are denying responsibility.

We paid 30% on a 270k build, followed by 4 staged payments and 10% retention.

We wouldn’t accept 10per cent retention. It’s usually 5 per cent with half released on practical completion.

She’s a belter - 30% up front?! For a large firm?!

Er, no unless you are some massive steel frame subcontractor who needs to pay for steel, OR you have serious design input before delivery (eg lifts, escalators) but that is still work. And not what the OP is looking for which is a residential project easily covered by merchant credit.

OP, get proper advice and a proper Minor Works contract.

Please ensure you pay nothing up front. I always offer an early valuation because cash flow is so important on a project. But before you agree to anything, insist on seeing a programme. Decide when the valuations will be and only pay when you (or your architect/QS) is happy that the bill for that stage reflects the amount done satisfactorily.

We were supposed to pay in thirds but the first payment was made when they actually started , a firm local to us that I had got a quote from scammed lots of people out of deposits and then disappeared .

none
30% the first day he shows up for the job.

We mostly stick to working for schools, hospitals, universities and prisons now.

And since the Carillion debacle we are even more careful.

if he needs money to buy materials get him to buy them at the merchant and pay the bill directly.

The customer would lose the whopping trade discount on materials if they did that.

Thank you all. Is it the quantity surveyor who would draw up the JCT?

I would be concerned about anyone wanting to take a sizeable deposit. Every time we have had work done it was the sleazy salesman types who tended to say things like "Oh, and we only take 50% up front" as if they were doing you a favour. The best people we've worked for was always payment after the work, or in stages as the work was done.

A kitchen company near me went under a couple of years ago. They were taking 30% deposits up to the day before they went under...

Stanski - you can fill in the form yourself. And even cheaper, you can write your own contract referring to ‘the terms of this contract will be governed by the JCT Minor Works 2016’ but only do that if you or your architect have actually read it! The JCT does a home owners one that is even more straight forward.

It is true that it is not the law that you need to have a JCT or any other type of contract. But, building contracts are governed by law - and most of what you read on these boards doesn’t follow the law...

If you have an architect/design professional involved, ask them for a quote for managing the contract including, say three or four variations. This will mean they come to your property and check the work is done correctly to the correct amount before you pay anything.

We only paid as each stage of the build was completed. Nothing upfront. But will depend on the size on the building company and their cash flow I suppose

I didn't pay any money up front.

My builder ordered materials from the builder's merchant, passed me the phone and I paid for it.

At the end of the week the builder wrote me an invoice for the 5 days he had worked, I then transferred the money directly into his bank account.

I paid the electrician directly, as well as the plasterer, the roofing chap and the double glazing company. I was invoiced by them and paid immediately before they left my house that day.

The builder originally gave me a quote for the entire project.

Even though I paid each trade individually, the builder's merchant and the builder for his labour and his general handy man, it came in on budget, on schedule and he was the tidiest builder ever, as were each of his tradesmen.

MoBiroBo would you mind telling me how it worked out paying the trades separately? Was there a difference in price compared to your builder quoting for the whole job? I’m trying to work out which is the best way to do it for our project! Thanks

If they're not VAT registered then you can save a reasonable amount paying direct.