Hire payment terms

[WWilts]

On the verge of signing contract with a builder who seems suitable in nearly every way.

 

For site facilities hire, what are the usual payment terms?

Deposit % plus weekly payments? Lump sum up front? Arrears?

 

Trying to work out what advances (if any) the builder is likely to be paying out to their suppliers. Will allow informed decisions about payment schedules. 

 

[Conor]

We allowed a 2.5% project deposit, followed by four main stage payments and a final 2.5% retention. Seems to be a fairly common way to do it. Remember vast majority of builders have credit accounts for suppliers, so the need for any big lumps of money upfront can't really be justified.

[markc]

+1 on the above

[Temp]

We retained 5% for a year. That 5% was deducted from each stage payment.

 

Our builder provided his own WC, site office and storage container included in the price quoted.

 

At one point he asked if I could help with his cash flow and I agreed to purchase the windows myself. If you do that you have two choices. Write him a cheque less the VAT or pay the window company Inc VAT and reclaim it. The latter is safer.

[PeterW]

@WWilts are you referring to things such as site toilet, heras fencing, scaffolding etc .?? 

There should be a line in his costs marked “Prelims” and all of that goes in there. It’s paid at the point that is agreed and the only issue will be when he’s estimated a build cycle of 24 weeks and you get to week 25 - who is paying for the price overrun on hire etc (which should be in the contract)

 

Heras is sometimes cheaper to buy than hire as you can resell it at the end if it’s looked after.