When your about to hire a contractor like Dependable Construction It’s important ask questions and get every detail about the project written in the contract. This includes the deposit and any scheduled payments. If the contractor has been paid more money than the completed work on your project, he has the leverage. But if the homeowner has not paid for work provided, they have some leverage in a dispute.
Now everyone runs their business different but reality is this. To start an average project there are costs. Administration costs, salesmen/estimator, permits and purchasing materials and delivering these to the jobsite. If your contractor asks for a deposit, make sure you don’t get too far ahead of the work being done. Remember any contractor that is solvent in the business has a line of credit with his suppliers and should have operating capital to work with. If he doesn’t have good credit and is using your funds to pay last months bills, is he the contractor you really want to hire? All contractors may not be out as much money as you think in the beginning.
It is also important to know the suppliers along with sub-contractors, used on your job, may have lien rights for the unpaid materials delivered and labor done on your home. Every state has their own laws and it is up to you to know those laws. It is wise, when you are paying for materials or sub-contractors to keep records and to get unconditional lien releases from those parties. It is normal to receive a preliminary notice of these lien rights in the mail, so don’t be surprised, it is the law to notify you of their rights and action they can take if the contractor does not pay them. I know it is a pain for the contractors to provide lien releases and I won’t be on their friends list for these suggestions but these are ways to protect your deposits and payments paid to the contractor.
So how much is the deposit for your project? That is up to you, your professional, the bank and the state you live in. Do your research to make a wise but fair decision. Don’t be one of the people that gets burned and paid for that dream project or large deposit only never to see the company again.
For more help call Dependable Construction today at (937) 318.9572. We can help you turn any house into your dream home while only using the highest-quality materials and best workmanship in the area.