In the contractors legal thread … Gene mentioned no one in his area (subs) asks for a start check.
here … I do … and so does most everyone else.
Usually 10% …. or …. a “materials deposit”.
Others may call it a “scheduling deposit”.
Basically … no one works out of their own pocket. All the mechanicals will need a start check for materials, at the minimum. Gene also mentioned painters … painters will need money up front for their stuff too.
I lat out the “start check” and pay schedule in my contract. GC either agrees or not.
If not … I don’t start.
I’ve even shown up to “start” … with the GC saying he’ll meet me there check in hand … and a coupla times … he shows up and “forgot” the check. Lucky me … I showed up and forgot to actually unload all my tools to start.
Funny how that guy found his check book in his truck as I started to carry out the few tools I’d carried in to make an apearance.
I was curious how common “start checks” were thru out the country.
No need for a big discussing telling me you’d not pay one … fine … I simply wouldn’t work with ya. No harm, no foul.
Start checks are the norm around here. There are lotsa guys that will work without one … but most of the “better guys” simply expect to do business that way. Either pay it … or they’ll go elsewhere.
who does … who doesn’t?
Jeff
Jeff
Replies
In this area a start check is not typical. If you're talking special order stuff, maybe but our painter has never asked for any money up front.
Jon Blakemore
I've got the JLC Contractor's Legal Guide, and I was shocked to read it's illegal in California to take more than $1000 or 10% (whichevers less)! (Luckily, I live in Ohio.) I've been in business full-time for myself for almost five years, and on large jobs, I usually get 1/3 up front, 1/3 after the drywalls hung, and 1/3 at the end. Small jobs (less than $5000) are usually done within two weeks, and usually ask for $1000 to get started. Most, if not all, of my work has been referral, so I've got the client's friends for reference, hence there's never been even a peep of concern. I've even read on here that the final payment shouldn't be 1/3 either, but only a few hundred dollars. I assure people that I'm not going to disappear after they write the last check; I return phone calls if not immediately, by the next day, and if we've done anything that's not right, we fix it right away. Reading all of the posts from guys on here, and how committed everyone here is to doing good work, I'm always puzzled how contractors got the bad rep. Maybe it's all the guys without internet access?
Edited 5/1/2005 2:12 am ET by Jack
I deal primarily with the home owner and my jobs are typically 3-10k. I get 10% to put you on the schedule. That avoids the desire to back out after deciding to buy a new car on impulse. 50% the morning of the start and the balance when finished. And unless I have worked for you before I am there to collect the evening we are done if I didn't see you earlier. If it sounds like I lack trust you are correct. DanT
I live near Gene and concur that nobody asks for a start check, at least nobody who is well established. If someone is just starting out in business, they will have to ask for money up front and this is expected by all parties.
We would not have a problem paying a sub start money but they are more concerned about getting paid promptly when they submit a bill. That and getting the last bill paid in full are much more important.
in our insurance repair work, no we don't, as long as our name is on the check from the insurance company.
in remodeling, absolutely. varies with job size. generally 20% to 50%.
the one time on a remodel we didn't get the check ( read that HO forgot to mail it ) we started the job anyway because it was scheduled and we didn't catch the missing check, guess what, at the end of the job
we all know the rest of the story
someday when the house is sold........
carpenter in transition
Dunno how much the area has to do with it.....I think its more the individuals and the working relationships.
When I`m contracting a job, I expect and actually prefer to provide a "start check".
My electrician however, rarely requests one and I often have to chase him down throughout the job trying to pay him. I much prefer a payment schedule over a lump sum come the end of a job.
When I`m one of the subs on a project, I don`t show up to the jobsite without 30% up front. Projects requiring special orders will require larger start checks.
Give an inch....they`ll take a foot.
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My observation is that up-front money is a feature of the remodeling biz, but not of new construction.
We'll pay for materials, if they are delivered to the job, but we'll only pay for their invoiced cost. We won't pay a markup on the materials until they are installed.
Edited 5/1/2005 8:22 am ET by Gene Davis
That's how it is here Gene. I've never asked for, nor gotten a "start check" when subbing, and I would never pay one either if I hire a sub. If I pay out a start check and they never show up again, what do I have as security?
If I don't pay them, they have the property as security.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Yeah, Blue. It's like, "what am I getting for writing you that up-front check?"
What you might be getting is what KC Marie got. A big PITA.
That's the way it is here too. New construction: no, homeowner work: yes.
Also, here, in new construction materials are typically supplied by the builder - so no money is necessary to cover material expense. Exceptions would be roofing (sometimes), and vinyl siding, but, generally, those jobs are done so quickly that a Friday paycheck is acceptable to any established subcontractor. An exception would be the trades (plumb, elect & HVAC) who all supply their materials but who get, typically, 50% at rough in completion and 50% at final (trim-out) completion. These payments are keyed on passing inspections. Painters, who also supply their materials, usually get 3 payments - exterior, interior, and touch-up. Matt
I don't see start checks around here. But I do see people expecting to be paid immediately on completion.
When I hired this house painted, the paint lady called the next day to see if I had written the check yet.
On larger remodeling projects, I get equal thirds. One up front, one when the drywall is up, balance on completion.
For smaller jobs, I get 30% up front, balance on completion. That at least covers my overhead if there's a problem, but there rarely is.
It's not because I need money to buy materials or anything. I want clients to have an investment in the project so they understand what we're doing is serious.
Read about an attorney once who represents mob guys. They always stiff you on the bill, so he triples his fees and demands a third up front in cash.
-SB
I think size of the job matters here, but I personally will ask brand new clients to put money down.
A lot of my business is referred, or I am at least acquainted.
Some people seem confused and ask me if I dont ask them for money.
-zen
Around here, it depends on who is buying the materials.
Who Dares Wins!
When I do a job on my own, after the time spent figuring the job, hours involved, checking material prices etc...when I sit down with the homeowner my contract states 50% down on labor and 75% on materials, the balance of material cost when the materials are delivered to the site.
That 50% labor cost is about what I figure is my break even point, that way if I do get stiffed at least I'm not losing money, and so far no one has ever stiffed me nor complained about what my up front charges are.
I did have to threaten to sink a sailboat once when I was 18 and built a porch for a summer resident of upstate NY who loved my work but thought he could outsmart an 18 year old "kid". I mentioned something about an axe hole chopped in the hull of the boat and seeing nothing but mast sticking out of the water some morning when he woke up, he went for the checkbook and then I shifted gears and told him cash only...we made the trip to the bank together....
If you aren't one of the one's I'm talking about,you shouldn't have any complaints....
I've never received a start check, from either a customer or GC. I may be naive in thinking this, but I generally deal with customers I think can afford the job. Not requesting a start check gives me instant credit with the customer. They know I'm going to show up and finish the job, because they haven't spent a dime. Around here(Pittsburgh) it seems like everyone with a pickup and ladder rack thinks they are a contractor, and lot's of people have been ripped off. Most jobs I do are under $10,000, and most of the price is usually labor.
When I first started my business(I was broke), most new construction GC's would pay a draw when I was 50% done, and rest upon completion. Now mostly, I just get a check when I'm 100% finished.
My main theory is I shouldn't do a job that will break the bank if I don't get paid. I think that's the biggest problem with most business people in the trades, they live on the margin, and are one bad customer from folding.
All of that said, one kitchen company I sub for gets 80% of their money up front(most jobs are in the 30,000-$100,000 range). They are well established, and can't sell the jobs fast enough.
I think Home depot and Lowe's get 100% of installed sales up front.
People just trust them I guess.
Edited 5/1/2005 11:16 am ET by dustin
"I think Home depot and Lowe's get 100% of installed sales up front.People just trust them I guess. "There is also the fact that HD and Lowes consists of more than a truck with a magnetic sign and phone that can easly be disconnected.
And, if HD and Lowe's do in fact (I don't know) want 100% up front for installed sales, I can put it on my Mastercard.
Which gives you a 2nd way to challenge them if they don't do the work.
I mostly make custom kitchen cabinets. I get 45% when I'm ready to start, 45% when the cabinets are made, BEFORE I install, final 10% when the job's finished. Customers never have a problem with this because most kitchen co's in the UK get 100% up front
John
Remember, that when it comes to contracts (legal documents) and doing business with another human being, there are rules.
Who is it that you go to when you need to make sure that the rules are just, that the rules are understood and that the rules can be enforced?
Who is it that will NEVER (beyond the initial free consult - sort of like our first visit with a customer) do a LICK of work WITHOUT A RETAINER?
If a retainer is good for a lawyer it is definitely GOOD FOR ME!
So, my retainer puts you on the go list and will cover the work I do up until the time I post the permit on the job, such as design tweaking, extra visits, sub scheduling, material scheduling, the engineers stamped drawings and the price of the permits. PLUS overhead and profit for that period of time.
What??? You think that the initial visit/consult is REALLY free??
I don't pay my lawyer upfront, either.
I don't pay my atty up front either.And last time I paid a contractor up front--excavator for retaining wall materials--he walked off with the money and spent it elsewhere.Doesn't mean I wouldn't do a start check (after all, I get one for my design work), but I gotta figure out a way to protect myself or I'll never hear the end of it from DW.
I can see both sides of this dilemma. For the trades its knowing that you are going to get paid for any initial work you do prior to that first payment. For the clients its knowing that you are not handing over your money to only see it disappear. Of course you can always go the legal route but what I was wondering was if anyone here has worked thru a sort of escrow arrangement where the customer puts money in so that the GC etc. knows its there, but isn't able to collect on it until the job is done.
I've always been a little leary of guys who need up front money to buy materials. It may not be fair but that indicates to me that they are either fly by nighters or don't have a solid enough buisness that is capitalized enough to take care of such things leading me to believe that they could be out of buisness tomorrow with my check in hand.
or maybe they just don't want to finance your project?
Why can't U finance it ... U some kinda fly by night operation?
see ... it can work both ways. About a year ago ... got a referal call ... lady was trying to sell her $650K house. It was sitting longer than most ... realtor said one more half bath would do the trick.
Priced the small bath addition out at $50K. Realtor said with the extra half ... he'd relist it for $750K .. and it'd sell quick. Sounded like a good investment to me.
So I'm talking to the homeowner ... I mention I'll need $x,xxx.xx dollars because I'll order everything at once so we can speed thru the remodel for her ...
She stops cold ... what? Money up front? Don't U have accounts with your suppliers?
Uh ... yeah ... but they didn't give me a line of credit so I could finance your new addition! So I pushed ... Uh .. what exactly are U looking for here ...
She wanted me to build it ... then pay me the lump sum ... after it sold!
Yeah ... I'll clear the schedule for that one ...
Jeff
Maybe you should have taken equity in the house. Say $70k with 10% per annum increase.
I bet she would go with the straight cash.
I don't disagree. But if someone expresses concern about how they're putting the $x out there with no certainty they won't be ripped off (forget my wording here...imagine it's more diplomatic...you know what I mean), how do you put their fears at ease?
With every proposal I give a page of references. People I have worked for, supply house managers, even an advertising rep. This should put there mind at ease as far as whether I am trust worthy etc. I have never had a homeowner offer this. Maybe we should ask for a release signed each time to do a credit check. Then during the contract signing we could sit down and review their (your) credit discrepencies. DanT
What Dan said.
in the end ... we either trust each other or we don't.
Plus ... there's the signed contract with my name on it.
It's way easier for a customer to check the background of a contractor than vice versa. Customers always seem to forget that we gotta trust them to actually pay as agreed.
Plus ... I work about 80% referals.
If someone did state right out what U said ... I'd most likely tell them there is no way I can instantly gain their 100% trust, so I think we not suited for each other. I've found in life ... those that are the most untrusting ... are those to be the least trusted.
Jeff
Realize that I'm still smarting from a recent case where a contractor I've worked with several times before, gave bonuses to, knew well (apparently not well enough), had a signature of...walked off with thousands I paid for materials. DA seems to have decided it's a civil case. No assets in contractor's name, so he's judgment-proof. So DW will freak at notion of advancing funds to another contractor. I can see each perspective.
Understood. Lotsa customers and contractors have been in your shoes.
Your case is a bit different ... maybe even worse ...
as U already "knew" you could trust the guy!
I hate thieves in any walk of life. Not only do they screw that one person they stole from ... they screw every other guy that comes in after them.
Can't blame ya ... wouldn't change my business practices for you ... but I can't blame ya!
Jeff
>Understood.And that's the key word. Most people just need to be heard. You (generic "you") don't gotta change for me...just show some acknowledgment of my perspective...and I of yours. If that happened regularly, life would be a lot smoother.Just went through a deal that coulda turned contentious, but each of us went above and beyond to reassure the other that we understood their concerns, and found a way to work around the touchy points. Builds trust without anyone giving up anything.
If I can't trust my subs, they don't need to be anywhere near the propertyand if they can't trust me, there's better jobs artound.if my clients don't trust me, there are bigger issues looming...ALL relationships are based on trust.
I trust my banker
unfortunately, I have to trust my insurance agent
my suppliers trust me
so does my wifewhere would we be without it? This is a maxiom for me - I don't need any relationships in my life without trust. it is there, or therelationship ain't.
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Don't get so testy. As the homeowner I'm not a fly by night. You know exactly where to reach me plus you can put a lien on my property. I on the other hand have no recourse except the courts and anything along that route is tenuous at best especially if you have no assets. You as well as the others have hit the nail on the head in that it is a trust issue as well as both parties needing to exercise some due diligence.
You asked if I want you to finance my project. No, but I also don't want to finance your buisness. Name me one other buisness where the product purchased in the types of price ranges that are being discussed here that one pays in advance. Even special order products that require upfront payment can be done with a credit card so that the consumer has some recourse in case what was promised isn't delivered.
The bottom line of all this is that beyond the trust, references issue what sort of protections can the consumer take advantage of, hence my query about the idea of an escrow account when such large sums of money are involved. Have you ever heard of such a thing? It would not be unlike a bank draw on new construction.
Rip, an escrow account would be an excellent idea for two parties that want to work together, but can't find enough common business practices between them to move forward. I for one wouldn't mind the setting up of an account like that.
blue
It seems to me to make sense especially in a situation where the parties are nervous. I was just reading a recent issue of FHB, specifically the article on change orders and the author made the point that unfortunately the days of doing buisness based on a handshake are over. I wish it could still be that way as I was taught that my word is as good as gold. Like Jeff said, its unfortunate that the bad apples have had a negative impact on the consumers view of the industry in general but thats the way it is. In addition I'm sure most of the people in the trade here have had their bad customer or two or three..... making them cautious as well, hence the idea of some sort of arrangement where both parties feel protected to some degree.
This started as a discussion of why or why not subcontractors get (deserve?) advance payment before starting work. The consensus seemed to be that GCs aren't paying subs early.
As for "start checks" paid to contractors by owners, the consensus seemed to be that owners were paying remodeling contractors, sometimes but not always, with up-front money. It did not seem to be at all a feature of contractors doing new construction work.
I think that remodelers, as a whole, have a riskier situation going with doing things like bathrooms, kitchens, room additions, and gameroom remodeling, for homeowners. Quite often the money is coming from savings, and there is no construction financing. Like one contributor said, getting a "down payment" provides some assurance that the owner won't decide to go and spend all or most of the money on a new Cadillac SUV.
That said, I am with you on the business of "no actual need" for advance cash on much remodeling work. Of all my suppliers, the only ones that require a deposit for materials are one (not all) of my granite countertop outfits, and also one (but not all) of my cabinet suppliers. In both these cases, the deposit required is 25 to 50 percent of the order, and is made just a couple weeks ahead of fabrication.
I have bought a lot of special-order materials, but never have been required to make a deposit on anything other than what I discussed above. Most everyone I deal with gives me terms that include monthly billings, and a discount for prompt payment.
Are remodelers that get lots of money up front passing the prompt-payment-discount on to their clients? I can't answer that.
California has it right, requiring no more deposit than 10 percent of job, or $1,000, whichever is less.
And finally, there are some remodelers, design-build and otherwise, whose strong reputations preceed them like the Macy's Thanksgiving Day Parade, who can dictate terms to their clients and get not only big down payments, but payouts in advance of each segment of the work. But those are the few, the cream of the crop. They are good, and if you want them, you'll have to pay per their terms.
As for payment in advance for other things, I started working almost 40 years ago, and did a lot of business travel. Remember those days when you booked "reservations" for things like plane fare and hotels, and paid for them when you got to the desk? Not now. Want to fly to Florida for spring break? Book now, book early, and be prepared to pay 100 percent up front. No changes, no returns.
Several comments back atcha -"Quite often the money is coming from savings, and there is no construction financing."
>>>>>Twice, I have had owners borrow t finance a project and then spend it before final payment, leaving me to wait."I am with you on the business of "no actual need" for advance cash on much remodeling work."
>>>>>That all depends - size or project, etc. Last month, my billing was six times as much as my own working available cash. Since it takes ten days to two weeks to get the check from away, that means that I can have six weeks of outlay tied up. If a payment comes in after the ten day window, I lose my discounts.
I paid every one before I got my last months chech and did some fancy dancing to do it. I have a deposit of twenty grand on the job, have twenty or thirty of my own to work with and have the AMEX card/checks.
It all worked out but that was the biggest month i'd ever had. Without the deposit, I could not have kept subs paid and the job would have slowed way down. Time is money - the equivalent, is that money can buy time. If you have a tight schedule, you don't want to slow down the river of cash." never have been required to make a deposit on anything other than what..."
A lot of that is based on your own credit historuy. When I started out, I had a line of credit at the yard for ten grand so a window order of twenty two grand required a deposit. Now, they just say sure, when do we need to deliver?"California has it right, requiring no more deposit than 10 percent of job, or $1,000, whichever is less."
Money costs money. I'm sure you have heard that CA is one of the more expensive places to build - for several reasons I'm sure, but that is one of them, without a doubt."They are good, and if you want them, you'll have to pay per their terms."
Thanks for the compliment
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One remodeling contractor I worked for as a PM had the payment thing down to a science. His payment schedule never allowed a job to go more than two weeks without a payment due, and it was not about cash flow as much as psychology. He said it straight to me... "I want every client to get in the habit of paying me frequently. I want them accustomed to seeing those bills coming in, and accustomed to writing those checks."
So, one week might go by where a job did not get billed, but if so there would be a payment due next week.
Of course a part of my job was to take the bills to my weekly meetings with owners. Opening the bill and going over it was part of the meeting, and most times a check would be written right there.
There were a lot of advantages to this: one was cash flow, another was psychology, and the last was that at the end of a job we were paid to within a few percent. And, we learned quickly whether or not people would pay readily.I just wrote a payment schedule for a 4 week job with 5 payments including the deposit. No payment within 3 days of the invoice means the job stops.
I like that theory
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"Name me one other buisness where the product purchased in the types of price ranges that are being discussed here that one pays in advance."any retail where special order is involved. I had a retail store and learned that one quick,when I got a month's worth of grtoss sales tied up in special orders that customers were slow to come pick up and pay for. handling special orders without money up fron=t is the quickest way to bankruptcy that I can think of for a busimness. Remodeling is ALL special order work - every bit of it.The reway you qualify a remodelor whether he is trustworthy with that money is to do what you should do before trusting him witgh your home anyway - ask around and follow up on his references to build your level of trust. Whether you pay with credit card or check or cash is up to you and the remodelor
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A Kohler toilet in one of their designer colors is a special order. I don't pay in advance for it.
A window package is a special order item. No advance needed. Likewise for prehung doors.
Pay in advance for a whole houseful of cabinets? Excuse me?
Special-match color paint at my Sherwin-Williams store? Put it on my account.
A run of pine molding, custom-made with knives matched to the old piece I dropped off at the yard? Yup, on the account.
A truss package. Hansgrohe faucets in nickel finish. Custom hangers from Simpson. Fabricated structural steel. I can go on.
Not much in building materials, at least from my perspective, requires money down.
A bespoke suit from my Bangkok tailor? Now there's one. He wants to charge my Visa card, right now!
"Put it on my account."
That is paying for it. You have commited to the item the minute you put it on your account or charge it on a card or whatever. You are now the owner of it. Go to court and try to get out of paying for a special order that is "on your account" but tell them that isn't the same as paying for it.
Now you may view it as not the same thing but you are committed to paying for it and can wind up burned for it with no advance money. Here is an example that happened to me.
I ordered a Kohler shower stahl. Charged it on my card. (I use a card so I get the airline miles) 3 week delivery I am told. Scheduled the job 4 weeks out to be safe. At 2 1/2 weeks I haven't heard anything so I check with my supplier. Kohler ran out of those and it will be 13 more weeks now till the next production run. Called the client. Thats what they want, no substitution. If I don't have a deposit I am paying for the shower whether I used cash or not. DanT
We're talking about cash flow here, not commitment to purchase.
What kind of pickup truck do you like to drive? Chevy? Ford? Dodge?
Let's say you want a new one, a big one. Super tow package, V10 engine, hot and cold seats. I say to you (let's pretend you are buying it from me) that it is going to be a factory order, and it'll take six to eight weeks to make, ship, and prep.
Here's the hard part. I tell you I want the entire $33,654 right now. No checkee, no order placement.
But back to the topic at hand. I'm still convinced that upfront money is a feature of the remodeling contracting biz, but not of new construction. Sure, we've committed to our plumbing sub that we need that special $2,900 shower unit, but there is no reason we should pay for it until invoices are in fact due.
I was in the door manufacturing business, and all our sales were to jobber-distributors. Doors are as special-order an item as things generally get. They are built per job specs. Do you know what kind of terms many big jobbers get from their manufacturers? The heavy hitters often are seeing ninety day terms with full cash discount still allowed.
Gene,I'll readily agree with you that remoeling and new construction are vastly different.If Ford gets stiffed on their F350 special order they can still sell it for 95% (SWAG here) of the full price. Maybe even more?When I remodel a bathroom and the client doesn't pay can I take that bath down the street to my next customer?I'm glad the rest of the remodeling business agrees with me because I like owing the customer (draw schedule slightly ahead of job expenditures).
Jon Blakemore
Aha! It ain't a cash flow question, is it? You're not paying for that special-order purple toilet and matching bidet when you place the order, are you? Of course not!
You want the money up front because you don't trust your customer, right? Contract or no contract, bank loan or no bank loan, you simply don't trust them. Is that it?
I think that's what it is. And if I was in your business, I would be doing the same as you.
But right now I'm doing new construction, and "up front" just isn't there for most of us on this side of the contracting spectrum.
i can't speak for Jon, but for me, it is a simple cost of money deal. money is necessary to make the job flow. Subs don't work unless they get paid - except in Florida, It sounds like - I trust my clients but if they want me to work with my money, I have to get that money someplace. That costs money. Even of I have that kind of cash sitting around, i can make money with it in other ways, easier and safer than in remo clients projects. So if they want me to work with my own money, that cost gets incorporated into the job. They would then pay more.If you run around putting it all on your account, and don't pay for 90 days, who is paying for the cost of that money? You think you won't? Think again!
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Gene,You're absolutely right. We prefer to only deal with those "great" customers who give you warm fuzzies.Unfortunately this is not always the case.Either way, trust but verify is the name of the game.Piffin does have some good point about the time value of money, but even on a small job where the interest could barely buy a good meal I still like to be ahead. David had a good point about the psychology of the matter. Once they have the beltloops then your going to lose your pants (to mix metaphors).
Jon Blakemore
Sorry, I missed your point. I thought you were saying by putting it on your account you had no commitment to pay for it.
I do primarily small jobs. $500 to 10k. One maybe two larger than that a year. So we may deal with 100-150 customers a year. I don't have the time to build long term warm and fuzzy relationships with all. Would I like to? You bet. Does it happen sometimes? Yes. But frankly a lot of my customers I only see one or two times so really getting to know one another doesn't happen. So in my case I guess the truth is trust lacks at times on my part.
And I am adamant about getting paid and collecting right away. So I have a low "gotten stuck" rate even though I don't know many of my customers well like some of you. Anyway thats my deal. Sorry for the mis read. DanT
I'm with you. Here, it's kind of hit and miss. Perhaps not so different. Some do, some don't. And I have noticed a difference between the roles of GC and sub, and the split between remodels and new const. GC's get a start payment. Period. I'm not footing the bill, drawing the plans, pulling a permit, and mobilising people on a handshake. Sorry. Subs in new construction almost never get a start. But they can get periodic or progress payments if their trade either has them there for a long time or there's a gap, i.e. plumbing rough in and plumbing finish.
Subs in remodels seem to ask for it more, and perhaps because they don't always know if it's a "sure deal" construction loan getting cut from a bank or if it's coming out of a homeowners pocket.
Size seems to matter too. I don't recall ever paying a partial to someone for a job under 10K. I'm willing, I just don't think that's ever been asked.
"If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man." - Mark Twain
When I was doing smaller jobs, I would get ten to 30% from owner with contract for bid amt. I have larger jons now, mostly cost plus so I get a deposit equivalent to tjhe average of a n expected opne month billing.
When I was subbing, i never got a depiosit from GCs. Donme job within a couplel weeks and paid righrt away. Those whio didn't pau prompt didn't get work from me.
Now, my subs get a check when they aask for it. Deposit up front, halfway, finish, whatever it takes to keep good men working and happy . Most don't ask for deposit - partly 'cause they know it will be in their hands when they bill.
I don't kniow that area makes any difference. I have worked around subs and GCs both who did not like the idea of taking adeposit, thinking it might hurt the rep or chances of getting the job, or who thought it was plain wrong, but i was always able to get deposits in same area when It was presented as part of the deal.
When I do not aask for a deposit is when i am not sure of start date or if I'll even be able to start - because once money changes hands, there is a bopnafide contract deal. Just last week i returned a 2500 check to a lady who sent it unasked for. Last fall we talked - i estimated and was ready to do the work. She said wait until spring and I said, WE'll see...Spring is here and i'm beghind schedule and she sends a dep[osit along with some particular requests/stipulations i had not agreed to. I sent her check bback because I will have a hard time fitting the job in, and because I am now leery of additional 'addendums' in writing to what was only an estimate. Had I acccepted the check, I would have been accepting her demands and her scedule.
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Small job (up to maybe $3K and/or one week of work), stock materials from the lumberyard or around town, stuff I can return or use elsewhere... no deposit. I do the work and bill for it.
Small job, special order materials or stuff I have to go off the island to get, deposit equal to the cost of those materials. Then do the work and bill the rest.
Larger jobs, anything that requires clearing the schedule and really moving in, then I want a $1000 deposit plus the special order stuff up front. In CA it's no more than $1000 or 10% and I'm used to that and it works fine.
All of this is based on a detailed contract and scope of work, proper pre-lien, etc. No one has ever in 20 years failed to pay every penny. In one case about 10 years ago I failed to be adequately clear about the sales tax that I had to charge, and I forgave a guy $60 in tax that he seemed very betrayed about.
That's it. I don't know what anyone else around here does, but I have heard lots of stories about the cash-economy guys disappearing without finishing jobs.
along the same lines---
moved down to #### florida,every time i come here i remember why i left the last time
first one -siding contractor or so he says.i pay every two weeks and so that means that you wait three weeks for your pay lol sorry dont think so
second one (still fighting with this bone head)
hell yeah i need someone who can do layout blah blah he will do all the truss sets i just do the interior. friend of mine says dont worry his money is good all that
work about 68 hours first week,3:30 fri afternoon i say so what do we do follow you to the bank or what?Oh no even though i pay cash the first week i hold back a week
grumble drive away before #### gets serious
today -fri. go to get the money on my lunch break from another company
nah man ya gotta meet me here at 3:30
pissed but ok cause we knock off at 1:00 on fridays
you guessed come 3:30 they have packed up and gone
call on the cell -oh i had to go to st pete to pick up my check i'll catch up with ya tomorrow afternoon
like i said every time i come here i remember quickly why i left
guess what im sayin is how far should an employee trust his boss?
Edited 5/6/2005 7:54 pm ET by bud
I've tried this several ways and came up with the following:
Homeowners - Calif. law says I can't get more than 10% or $1000, whichever is less, up front, and can't get ahead of the job EVEN TO PURCHASE MATERIALS. Now for what I do - concrete repair and decorative resurfacing, this isn't a problem. For a job of any substantial size, or if my "gut" tells me, I'll include a lot of "progress" payments in my contract terms so that the customer can't get far ahead of me. Some other trades that I work with regularly get around the contracting law limitations by having the homeowner send money directly to the material supplier (expensive cabinets, expensive doors etc.) in order to have them shipped. Don't know what the legal ramifications on this are, but it seems to work.
When I'm working on a commercial project, or as a sub, it depends on the owner or GC. If it's someone I've worked with in the past, and have a good financial relationship with, I'm really open to whatever arrangements they want to make. With a new customer, I'm like you - keep my financial health in tact with up front and timely progress payments, or find someone else.