Hello All Can anyone offer advice or opinion, I am due to have some building work carried out on my new house, the builder comes recommend from various people who have had work carried out by him, he is asking for money upfront to start the job, about 5% of cost which will amount to a £5000.00 payment on the day he starts, then stage payments, I would normally always pay on completion of various parts of the job being completed, (stage payment) thanks in advance for your comments
Rather high inital figure to me, & I take recommendations with a pinch of salt, especially if builder recommend these people, but I am a cynical bar-steward. I be doing my homework throughly on the builder, & would want to see the work he has done elsewhere & whether people were satisfied. He might be ok, but with 5k upfront, there is that risk, others have been caught out this way. Nothing wrong with stage payments though, just inital deposit,especially as it's cash up front, need more details on work OP is having done. EDIT: And NEVER, pay cash.
Remember going to a a the NEC Home Building & Renovation Show a few years ago, the DIY Doctor was there in one of the talks, recommend drawing up a contract with building contractor, think he sold a book about it. wouldn't pay cash, always BACS or cheque so there are records. total cost of project = £100,000 Also look at previous recommendation for builder, as well as going onto companies house.
Never pay cash up front. If he is that short of money or he has that little trust in you just walk away or tell him to. And make sure that any stage payments are fully reflected in the work carried out to date. Best going off personal recommendations or jobs he has done in the neighborhood.
Thanks people for you speedy responses, may have to add more info tomorrow, just off out to an old boys reunion and will probably be talking broken biscuit later
I don't see a problem with a payment on the day he starts. I will sometimes ask for a deposit before work even commences. As long as there is a "paper trail" to show this is agreed. On the flip side, he probably needs payment on the day of start because he can't get credit accounts with merchants (because he's gone bust previously).
I think it is quite normal for a deposit for such a large job. With lettings , there is a deposit account where tenants deposits are stored for safe keeping under a government body. Not sure if anything exists for for building works though.
In my main line of business we will often ask for a "mobilisation fee" depending on contract value. It covers anything that we need to do at the start and expenses for te first month. At the end of the month we need to pay salaries/wages sand will need to cover that. The first invoice may not be raised until the end of the month and then will take a couple of weeks to be paid (or longer). In this case, I cannot see an issue as he will be buying materials immediately some of which may not be "on account". Perhaps you can negotiate a little, say £1500 at day 1, £1500 at day 15 and then £2000 at day 30. What ever you do, make sure there is an invoice and signed receipt for each. Cheque or transfer is preferred, however if there is a written trail cash is OK, provided he does not want to work "cash in hand".
Alarm bells start ringing when people just demand money like that. I would ask for an itemisation as to what it is needed for. If it is for something special and expensive like an RSJ that has to be ordered and paid for straight away then possibly. If it is for wages then, I would pay them weekly on a Friday and only for the work that has been done. If I am going to get something like concrete, I let the person know in advance what the amount is and either get a cheque off them or get them to pay the firm direct, much easier.
On a 50k job 5k upfront is tiny I would want double that, and then stage payments along the way, to many people allow work to go to far before payments and then get screwed by dodgy customers.
I think I may be missing something here? So we have REPUTABLE trades people here encouraging customers to pay nothing upfront? For any job I do, except the bill is under £1,000, I ask for all materials requiremewnts to be paid (at least 3 days) in advance of the work being done. If I must be shafted, then let my wages take the hit. On no account will I provide materials for your work. Why should I. I always discourage cash payments. Bank transfer or cheques as there is a paper trail. Where the customer shows any signs of dragging their feet, I gladly walk away. Infact, I know of TWO ocassions where the customer ''kicked up a fuss'' about the materials payment, and when I asked them to use someone else, the made a bank transfer a week later? I just phoned and informed them that the money was being returned back to them and followed through with returning them the money.
I would want 20% as a deposit to book in the time slot alone. If the client decides not to go ahead with a 4 week project at short notice who is going to pay your lost wages. That 20% then goes towards materials cost so you are not ever in the red. Staged payments on a contract that size. Anything under 5k and I want 20% deposit - 60% on first day - 20% on satisfaction. Oh, in case you are not sure, NEVER PAY IN CASH.
Trust works both ways, I see nothing wrong with the builder requiring a payment up front to cover some materials to start, NOT for wages for work that hasn't been done yet. If any dispute arises at that early stage, you don't lose anything as you'll still have the materials in your possession. Especially regarding an extension or substantial renovation as the materials spectrum and cost is significantly larger and higher than painting a bedroom, for example. And yes, make sure you have a paper trail just in case you have to prove anything later on.
I'm afraid I disagree with most of the above. I don't believe that a builder should request up front payment. My standard advise to my drawing customers is not to consider any builder who does. There are just too many cowboys out there.
Correct there are, but there are as many bad customers, so why should a builder be out of pocket, there is nothing wrong in holding say 20% as a retainer to make sure all work is of an acceptable standard. As for not considering any builders who ask for upfront payments, can't be much work going on in your neck of the woods then. I wouldn't entertain a customer who wouldn't pay a upfront payment, rather not do the job.