May 9, 20242 yr Hi. I have agreed a price with a contractor to do groundwork’s and interior fit out of timber frame house. He wants 15%on signing and 10% two weeks before starting. So 25% up front which is a big cheque. Thankfully this doesn’t include the timber frame/windows/roof/PV/and most internals are on fit only, but still a big cheque. we are financing with the money from our house sale but expect to need a mortgage at the end or we will just have a pause. What is normal? I want to negotiate this down so at least I am only paying up front for the next stage rather than the something 9 months in the future.
May 9, 20242 yr Nothing up front is normal If he’s that strapped for cash (One man band ) Tell him you will give him a payment at the end of week one Your not there to finance his other jobs Im a plastering tiling and render contractor and I’m on 30-60 days after week one
May 9, 20242 yr 1 hour ago, Barny said: He wants 15%on signing and 10% two weeks before starting. That all the profit and overhead for the job, and the rest at cost. there are as many tales of tradespersons going unpaid by dodgy customers as the other. Payment at the end of each week is fair for a longish project. If they can't finance he materials then that's a problem, so you can offer to pay direct. Builders' merchants like credit cards.
May 9, 20242 yr Author It is 9 month project so 25% up front seems far too much. As it is a timber frame they are going a month of ground works and then are off site for a month or two whilst the frame and windows etc get done by others. The groundwork’s is only about 25% of the total bill.
May 9, 20242 yr We were months into it before I got the bill from the groundworks company. He’ll be on credit terms with his suppliers so if he argues it’s to pay for materials then you’re advancing him the money. If it’s labour then you’re paying him for work he’s not started. Therefore you either agree to pay him weekly in arrears as a percentage of the total cost, pay him for actual work completed (that can be hard to work out) or pay him at the end if his first stage. Certainly do not pay him up front.
May 9, 20242 yr if your happy with the builder, ask why the upfront payment is needed. If its for some specialist / bespoke materials then this is reasonable and you can pay the merchant directly and ask the merchant for a vesting certificate. If he just needs money to bankroll his operation then ask for an advance payment bond. Both are not expensive and all arses are covered.
May 9, 20242 yr I looked into an advance payment bond for our timber kit and the cheapest quote I got was 8% of the total contract value which was a sizeable amount so I didn’t proceed with it. The two companies I spoke with said they’d never set one up for a self-builder before. It’d be interesting to hear if anyone on here has used such a surety bond before.
May 9, 20242 yr Just now, Kelvin said: I looked into an advance payment bond for our timber kit and the cheapest quote I got was 8% of the total contract value which was a sizeable amount so I didn’t proceed with it. The two companies I spoke with said they’d never set one up for a self-builder before. It’d be interesting to hear if anyone on here has used such a surety bond before. not you who is getting the bond its whoever your paying.
May 9, 20242 yr 2 minutes ago, Dave Jones said: not you who is getting the bond its whoever your paying. In my case, for the timber kit, the kit company wouldn’t fund the bond. It was on me to fund it.
May 9, 20242 yr Just now, Kelvin said: In my case, for the timber kit, the kit company wouldn’t fund the bond. It was on me to fund it. yet another reason to never use sheds.
May 9, 20242 yr 3 minutes ago, Dave Jones said: yet another reason to never use sheds. Or any system where you’re funding anything up front.
May 9, 20242 yr 4 hours ago, Kelvin said: if anyone on here has used such a surety bond before Me, loads of times but it was because of huge lump sums. eg £100k+ for made to order kits. They were written so that the 3 parties were all covered...client, contractor, supplier. It is expensive. Think how much commission you would want if you were the bond provider. Even then, the bank or insurers are not going to take a risk so someone has to deposit the money or give some other guarantee. You will be paying that 8% whoever sets the bond up, somewhere within the cost.
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