Deposits

wirehairmax

What are peoples opinions on giving contractors deposits before a project commences? Is it common in domestic construction projects? A number of people have said it to me recently that they have given deposits to contractors for extensions, renovations and similar type projects.
Up to now we have worked for private clients and never taken a deposit but after been caught on a few occasions, we are wondering now if we should be taking deposits up front and making sure we are always on the right side of the account.
It has happened on too many occasions that the last payment is difficult/slow to get paid and with margins being ridiculously tight, the last payment is usually the one that means you can pay yourself something.
Of course the ideal situation is to have an architect supervising and administering the contract. However even in this scenario, an architect has no control over the cheque-book and there are plenty of people out there that don't have any word and contracts don't mean a thing to them.
I'd like to hear opinions from other contractors and trades if possible as well as the public.

Doom

I wouldn't give a deposit, but I would make stage payments.

vinnie13

anyone i know looks for something up front something half way and the rest on full complettion

bryaj

I don't look for anything up front but request payments after week 1, 3 and forthnightly thereafter, I am also happy to have retention deducted @ 10% and reduced to 5% on agreed practical completion. Retention period of say 3 months.

A schedule of payments is agreed before starting on site and it is clearly explained to the client of the importance of meeting these agreed payments to maintain cash flow or project may suffer.

Our suppliers are paid on delivery and sub-contractors on completion of their items of work.

We are engaged in domestic extensions generally.

I have however lately been considering asking for proof that funds are in place at the risk of offending.

Maintaining cash flow can be difficult.

BryanF

My two cents As a specifier: 6% retention, 3% on practical completion and 3 after defects liability period of 12 months. Nothing up front. Would consider bimonthly payments assuming work stages are clearly defined.

DOCARCH

bryaj wrote: »

I have however lately been considering asking for proof that funds are in place at the risk of offending.

Just to let you know that if you are working under the standard RIAI/CIF/SCS contract...you can/you are entitled to that if you want.