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Project Manager HFH..
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Do general contractors get a deposit check from owners. If so, then why do they look at me like I'm from Mars when I tell them my company requires 33% down?
Speaking from someone that contracted in California only. GC's (or any contractor) are limited to 10% or 1000.00 whichever is less.We are expected to have operating funds available....
 

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Unless you have an established relationship with the client, lots of them will be reluctant to give you that check. Too many crooks have taken the money and never showed up. If I am in that situation, I will arrange for a deposit when the materials show up for the job, or a small portion of work has been done. This way the owner feels confident that you are on the job and materials are on site. You are covered for the costs of materials and make a few bucks off your margin on the materials. This lowers the risk to you as too how much you have out, and lowers it for the customer as he has seen some progress. If they wont pay up at that point, load up the materials and get the hell out of there. Lots of customers are crooks too.
 

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Modern Wall Systems
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Discussion Starter · #4 ·
"Speaking from someone that contracted in California only. GC's (or any contractor) are limited to 10% or 1000.00 whichever is less.We are expected to have operating funds available...."

Well, I know where I won't be relocating to. So if the job is a $20,000 (labor, materials and equipment) contractors are expected to finish the job on a $1,000 budget? What if the owner doesn't pay?

Me personally, no deposit, no work.
 

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Speaking from someone that contracted in California only. GC's (or any contractor) are limited to 10% or 1000.00 whichever is less.We are expected to have operating funds available....
I think the OP is talking about the blank stare he gets from the GC when he hits them up.

I think the $1000 limit applies only to Home improvement. Different rules apply to home, commercial and industrial construction. Even if he is doing a home improvement job, as a sub I think the OP is entitled to as big a deposit as he can wring from the GC, with no legal limit.

Even in CA
 

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"Speaking from someone that contracted in California only. GC's (or any contractor) are limited to 10% or 1000.00 whichever is less.We are expected to have operating funds available...."

Well, I know where I won't be relocating to. So if the job is a $20,000 (labor, materials and equipment) contractors are expected to finish the job on a $1,000 budget? What if the owner doesn't pay?

Me personally, no deposit, no work.
In California you can accept payment when work is done or materials delivered to the site. Progress payments allowed as long as you're consistent with that rule.
 

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For jobs with more than a few hundred dollars in material I require a deposit equal to the material cost or else have the customer pay the lumber yard directly. I've never had someone turn me down for that policy.
 

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Project Manager HFH..
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I think the OP is talking about the blank stare he gets from the GC when he hits them up.

I think the $1000 limit applies only to Home improvement. Different rules apply to home, commercial and industrial construction. Even if he is doing a home improvement job, as a sub I think the OP is entitled to as big a deposit as he can wring from the GC, with no legal limit.

Even in CA
My point was that if the GC can only get 1000.00 then the chances of said GC giving a sub a deposit are pretty slim. I know I never once gave a sub a deposit for any type of work. Net 30 all day, everyday.
 

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I think the OP is talking about the blank stare he gets from the GC when he hits them up.

I think the $1000 limit applies only to Home improvement. Different rules apply to home, commercial and industrial construction. Even if he is doing a home improvement job, as a sub I think the OP is entitled to as big a deposit as he can wring from the GC, with no legal limit.

Even in CA
Yes, all true.
 

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Speaking strictly from a commercial standpoint, I've never gotten a deposit in 30 years. It just doesn't happen.

Of course, my schedule of values normally has line items for Mobilization, Insurance, Safety, submittals and anything else I can think of. Yes, it's at least 30 days (probably more like 60 today) before you see any cash.

Having said that, Florida also has some "interesting" lien/notice laws that give "some" protection.

I also ask for some type of proof of financing.
 

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Light commercial I have seen deposits.... larger commercial never.... Residential renovation in Michigan I usually get 25% down, but the bulk of this almost immediately goes to order the long lead items like cabinets. I would almost never give a sub a deposit, I have bought materials for guys before and a couple times given deposits to drywallers, but i won't be doing that anymore. If it comes to it I'll just pay their supplier.

I've never had a shortage of subs, so if someone doesn't like my rules then on to the next guy. That being said any smaller outfits I try and pay as soon as they are finished.
 

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Modern Wall Systems
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Discussion Starter · #14 ·
Light commercial I have seen deposits.... larger commercial never.... Residential renovation in Michigan I usually get 25% down, but the bulk of this almost immediately goes to order the long lead items like cabinets. I would almost never give a sub a deposit, I have bought materials for guys before and a couple times given deposits to drywallers, but i won't be doing that anymore. If it comes to it I'll just pay their supplier.

I've never had a shortage of subs, so if someone doesn't like my rules then on to the next guy. That being said any smaller outfits I try and pay as soon as they are finished.
Wow. Don't you trust your subs? :rolleyes:

I would never work for a contractor that I couldn't trust either. The only reason I ask for deposits is to cover some of my costs up front.
 

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Nope, I don't trust my subs.

If I am on a 30 day pay schedule then why should I pay you up front?

Yes I have adequate financing and I pay my subs within 7 days most of the time when they finish. To expect a GC to finance you is expecting a lot.
 

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GC/carpenter
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Framer53 said:
Nope, I don't trust my subs. If I am on a 30 day pay schedule then why should I pay you up front? Yes I have adequate financing and I pay my subs within 7 days most of the time when they finish. To expect a GC to finance you is expecting a lot.
If you can't trust your subs why do you use them? If my sub said hey I'll need some money for such and such then I have no problem kicking to them. They've been working with me for many years and this has been the case before. Especially if they are ordering a bunch of high dollar fixtures.
 

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stuccova said:
"Speaking from someone that contracted in California only. GC's (or any contractor) are limited to 10% or 1000.00 whichever is less.We are expected to have operating funds available...." Well, I know where I won't be relocating to. So if the job is a $20,000 (labor, materials and equipment) contractors are expected to finish the job on a $1,000 budget? What if the owner doesn't pay? Me personally, no deposit, no work.
Great, I'll take the work you won't. I also might add as a condition to getting and renewing your license you are required to have a minimum of 2500 dollars in liquid assets.
 

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Modern Wall Systems
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Discussion Starter · #18 ·
Nope, I don't trust my subs.

If I am on a 30 day pay schedule then why should I pay you up front?

Yes I have adequate financing and I pay my subs within 7 days most of the time when they finish. To expect a GC to finance you is expecting a lot.
I'm willing to bet that lack of trust is reciprocated. :eek:

When I hire subs I only hire people I trust. When they finish, I pay them the same day. I guess that's why I have no problem getting electricians, plumbers or any other tradesmen to knock out jobs for me on short notice.

Do you get deposits from homeowners or businesses? Nowadays I think it is foolish not to.

I've done work for a couple of GC's in the past 20 years that never paid and I was left paying for materials, equipment and labor out of my own pocket.

Eventually they pay but only after lawyers get involved. $350 for a demand letter. whew!
 

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stuccova said:
I'm willing to bet that lack of trust is reciprocated. :eek: When I hire subs I only hire people I trust. When they finish, I pay them the same day. I guess that's why I have no problem getting electricians, plumbers or any other tradesmen to knock out jobs for me on short notice. Do you get deposits from homeowners or businesses? Nowadays I think it is foolish not to. I've done work for a couple of GC's in the past 20 years that never paid and I was left paying for materials, equipment and labor out of my own pocket. Eventually they pay but only after lawyers get involved. $350 for a demand letter. whew!
The only time I've ever been burned was from another contractor. This is why I only enter into prime contracts. I tell other contractors who call me looking for estimates is I don't work under other contractors. There's two reasons for this. One is because I've been burned before. Two they are often my competitors wanting to know what I charge so they can give the customer a price so they can do it themselves.
 

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Modern Wall Systems
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Discussion Starter · #20 ·
they are often my competitors wanting to know what I charge so they can give the customer a price so they can do it themselves.
:blink:

That's not very nice.

Fortunately for me I get a lot of repeat customers (GC's and homeowners I trust) but every now and then someone new comes (out of state company) along asking for a quote. So for my peace of mind I ask for a third and agree with their payment schedule once first payment is received.

I'm contracted to repair 16 stores in the Northern VA area which requires equipment rental, per diem for my men, lodging etc., etc. That cost money which the customer has to pay for up front.

Rarely do I have a problem getting deposits especially once they see my reference sheet.
 
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