What % do you feel is fair for a deposit on a large addition project (200k)? Would love to hear other people's experiences with this issue and what % they have given for large jobs of this or higher value. Thanks!!
0%, especially if you have never used them before. They may take the deposit and run.
If they can't cover the initial materials, they may not in a good financial position. I don't ever let contractors front load a job. You pay for materials that are stored onsite and work that has been completed only.
SACRAMENTO —The Contractors State License Board (CSLB) is alerting California consumers who are considering hiring a painter, landscaper – or any other type of construction contractor – that it is illegal to ask for or accept a down payment of more than 10 percent of the total home improvement contract price or $1,000, whichever is less.
That is a huge project. Instead of a % for deposit have your contractor break down scope of work. Ask him what he/she needs to purchase to start the project. Typically it's a dumpster, garbage bag and labor. For the beginning give enough to cover the initial materials/dumpster and tell contractor you will release more funds after majority of demo is complete. You want to know atleast 3 week spread. It's annoying and difficult for the contractor to keep requesting funds so at least you will know in advance approve amount they need. Typically 15% is held until an inspection is passed. Is this all making sense. Be careful with your money. Me being a contractor of course would like to get as much funds upfront instead of digging out of our pockets but the reality of working with investors especially that large will have to be something that you should be micromanaging unless you've worked with that contractor before. I know too many people who hired the wrong contractor either walked off the job with more than paid than finished. Be careful and good luck!
Specify progress payments; deposit + 1/3 + 1/3 + (1/3 with final permit signoff)
I have never hired a contractor that requires a deposit upfront. IN FACT, all of the contractors I have worked with have explicitly told me, that if a contractor requests a deposit before a hurdle has been completed to not hire them. Contractor should be paid based on the work that has been completed like @Jeff B. outlines above - 1/3 +1/3+ 1/3, excluding the deposit portion.
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