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Deposits

2457 Views 23 Replies 18 Participants Last post by  Stephen H
I have a question about deposits...

Im doing my first concrete project for a construction here. After quoting them a price etc, I was chosen to do it for them.
Since they are a construction company who builds houses on a custom level and they are supply all the material such as road crush, rebar, wood for forming walkway, patio and staircase as well as ready mix.
I always ask for a deposit, since all supplies are provided by them. Is it wrong to ask for at least a 35% deposit before work commences?

Thanks
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Was it stated in your quote a deposit would be required? If not I would say do the job without a deposit, since they are providing the materials.

If Im requesting a deposit I always make this known when doing the quote, I don't spring it on the customer after the fact.
In some states, a 35% deposit is illegal.
Deposits are not just for materials...
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10% is a maybe,

Companies i dont trust I want monies, or I no work,
if the job is small, I would fell like a dumb-ass asking a few hundred bucks before i start.
Read the OP again.
Deposits are not just for materials...
That was my point... just because materials are paid for does not mean you don't get a deposit. Larger outfits tend to take time to pay... unless you have a capital reserves and an emergency to float your business while you wait for the money, get as much as you can upfront...

Some builders and commercial will make you chase the money through making you the bank or by their own red tape/process... case in point, just posted yesterday...

http://www.contractortalk.com/f16/working-huge-company-getting-paid-148213/
Read the OP again.
I always get a deposit that covers my material and then some, normally 50% works... If I was just providing labour, I'd only ask for a deposit if the job was massive or if I didn't trust who I was working for (reduced risk)
Apparently you miss the point. He's not purchasing the material. And asking for 35% up front is illegal in some states.

It's got nothing to do with red tape, how big the customer is, how long it will take to get paid.

He's not purchasing the material. And asking for 35% up front is illegal in some states.





He's not purchasing the material. And asking for 35% up front is illegal in some states.
That was my point... just because materials are paid for does not mean you don't get a deposit. Larger outfits tend to take time to pay... unless you have a capital reserves and an emergency to float your business while you wait for the money, get as much as you can upfront...

Some builders and commercial will make you chase the money through making you the bank or by their own red tape/process... case in point, just posted yesterday...

http://www.contractortalk.com/f16/working-huge-company-getting-paid-148213/
I already stated I understood he wasn't purchasing material and that they were paid for... illegal in some states would mean US, he is in Canada... additionally, he is contracting with the builder as a sub, not the HO... don't know the laws in Canada, but my guess is he is not held to the same limitation as with a HO for deposits...

Get as much as tolerable... less to collect later...
Apparently you miss the point. He's not purchasing the material. And asking for 35% up front is illegal in some states.

It's got nothing to do with red tape, how big the customer is, how long it will take to get paid.

He's not purchasing the material. And asking for 35% up front is illegal in some states.





He's not purchasing the material. And asking for 35% up front is illegal in some states.
What States are those? Just so I'll know! :whistling
asking for 35% up front is illegal in some states.
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You decide what terms you are willing to work for and they decide if they accept. At that point you have agreement or you don't

I always advocate QUALIFYING customers before you decide if you are going to pursue their project.

The qualification process is having a discussion about their needs and if they will accept the terms you set or if you will accept the terms they require or if both are negotiable to a point where agreement can be reached.

With all due respect, there really is no right or wrong unless it is illegal or unethical and you have integrity. It all comes down to having a meeting of the minds on terms each party is willing to agree to.

Both sides need to be willing to accept the offer of the other. Sometimes it is give and take and other times it is more one sided. It all comes down to who needs or wants it more.

If everyone else does it one way and you don't want to, they may say no thanks because it's a deal killer for them. if they can live with it even if you are the only one then you will be able to make a deal.

Some contractors care what standard industry practice is and others are unphased by that and demand certain terms or they say buzz off. These are your decision if they are legal and you will base it on your business goals, practical realities and your non-negotiable terms.

Right or wrong if it is not illegal is rather goofy wording for your question. Asking what standard industry practice is in an area of the world and in a given trade is much more accurate to what I think you are asking. "Is it wrong" according to who?

The bottom line if it is legal is it is up to you what terms you are willing to work for and up to them what terms they are willing to accept.

If it is illegal then like 480sparky pointed out, yea it's "wrong"
Is it wrong to ask for at least a 35% deposit before work commences?
Deposits are not just for materials...
He's not purchasing the material.
Deposits are not just for materials.

Have you never heard of a "good faith" deposit?
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Even when it's contractor to sub? I thought those were consumer protection laws.
In some states, a 35% deposit is illegal.
This sounds like a labor and equipment only contract, and I see no problem requesting a deposit at start of work and progress payments pretty quickly as the work progresses.

Labor can be a big expense, and it must be paid weekly, materials usually are due a couple weeks later on account.

Get a deposit, and payment terms you can live with.
Stay away from Cali then, 10% or $1000 whichever is less. Also illegal to receive payment for materials not yet delivered or work not yet performed when sorting out process payments.
What States are those? Just so I'll know! :whistling
If it's legal, ask for the deposit. As a sub, unless the builder I'm quoting to already has a good working relationship with me, I won't touch a job without some up front money, even if it is labor only.

Don't like it? Hire some one else. I'm tired of getting dicked around by builders who want me to float their jobs.

I'm dealing with one "signature" home builder right now who proves why this is, often, necessary.

Deposits came quickly to get the job going. Now that it's done it's like pulling teeth to get final payment.

When you don't pay me, after I fulfilled my obligations you're stealing from me and that s*** doesn't float.
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Chances are you invoice by a certain date (usually the 25th) and get paid by the end of the following month. That is how most businesses operate.

If you can set something up quicker, great
I dig the O.P. Username...did you punch the keyboard and just say "voila!"

Lol
why?

i quoted and signed a $500 job today..told the guy give me $100

it is for a 2 stair tread replacement.
i have to go on a hour drive to buy the treads..prefinish them..then go to the job and install them.

this while we are actually working local and will run over on down time.

the $100 is for my time to get the treads.buy them and prefinish them..
i even told him this is to make sure you dont change your mind and i went thought the motions anyway.

i got gas, material and time to make his repair and life convenient..dont need him flaking last minute.
I normally request at least 50% upfront

Never feel funny for asking for money..I dont need practice..I need security
10% is a maybe,

Companies i dont trust I want monies, or I no work,
if the job is small, I would fell like a dumb-ass asking a few hundred bucks before i start.
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