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how much down payment?

Some contractors want 50% down on signing for a complete deck replacement. Some want 30%, some want none. What is reasonable?

MLB Construction
Re: how much down payment?
MLB Construction

everyone is a little different but 50% down is not standard practice.

let's assume your deck is going to cost you $8,000. i would ask for the following.

$200 upon signed contract to schedule the work
$2,600 upon start of work
$2,600 upon 50% of job completion (this point should be discussed so you know when 50% is 50%)
$2,100 upon job completion
Balance due upon punch list completion 2 weeks after job completion

these can vary somewhat but the standard rule of thumb is 1/3, 1/3, 1/3 at the start, middle and end of the job.

other factors that can come into play could be, materials taking up more than 1/3 or 1/2 of the job cost. the idea is to pay some money upon job start, some money at the mid point of work and the last payment when the job is completed to your satisfaction.

occasionally i'll have jobs that have 5-10 payments due, could be weekly, could be upon ordering or delivery of certain materials, payments can be due upon certain inspections, for instance.....job start, upon rough inspection, upon plumbing rough inspection, upon electrical rough inspection, upon final inspections, etc.

last thing to keep in mind is the contractor. is it someone you know and trust and has successfully done other jobs for you? is it someone that you found on craigslist? we're they referred?

if you're comfortable giving us some more details about the scope of the job, the cost, the info you have on the contractor, we might be able to give you a more detailed answer.

the last thing i want to say is that any job that is going to be more than a day or two....should NOT be 50% down for the first payment.

Re: how much down payment?

In California, a deposit is 10% of the job, up to $2,000. Not 40%, not 50%.

As the job progresses, periodic payments can be decided (progressive payments).

Don't let the contractor be in front of the job.

Keep 10% of the job as a retainer, to be paid after the job completion.

Also, insist on written releases from all suppliers, to make sure your friendly contractor pays his bills.

Re: how much down payment?

Speaking as an ex-painting contractor, when a contractor wants a large up front downpayment, it is an indication that his credit down at the building supply store sucks. An established, reputable contractor has a line of credit from the suppliers that will carry him through the job. Of course, on large contracts that can draw out for weeks, some partial payment accommodation is reasonable. The building of a deck should not last weeks. If it does, you got the wrong contractor.

Now a word of warning: where considerable material cost is involved, demand a "waiver of lien" from the materials supplier. This is a hold harmless agreement that if the contractor does not pay for the materials, you are not liable for their cost. this is especially important if the materials are dropped directly at your home by the supplier. The supplier knows exactly where his materials were used and who to go after - you!

Also: demand to see Certificates of Insurance showing both general liability and workman's compensation insurance. If one of his worker's is injured on the job and he does not have WC coverage, YOU are liable! I was always amazed at how few customers asked for such papers over the years. The few times I was asked, it was from people in the insurance industry who were aware of their liability should the contractor (me) have coverage

Granted, I as a painting contractor did not have as large a materials cost as a general contractor. I never asked for any money up front. On large jobs that ran for weeks, partial payments were arranged.

As the others have said, do not pay in full until you are completely satisfied. Once you have paid in full, you lose all your leverage! Even a well intentioned contractor has less incentive to get back to you once he has been paid and may put you on the back burner.

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