Contractor Requirements for deposit

ÜberFly · #1 10-13-2021, 01:13 PM

Quick question to those in the know...

I am aware that there is some kind of specific requirements that a contractor needs to have in order to take a deposit...

Can someone provide this info.

Small job in Calgary about $4000...

Thanks

Peter

Dean2 · #2 10-13-2021, 02:03 PM

Alberta has no protection for Consumers putting down a deposit. Contractor goes under or runs off, so does your deposit. I refuse to provide any deposit to any contractor. If they are too small to do the job without me putting money up front I keep looking. Only thing I have done for a guy that was just starting out is paid the supplier direct for materials that were delivered to my location.

If you do put one down, at least do it on your credit card. Then you have some ability to pursue for non-delivery but make darn sure the contract is VERY clear on deposit, refund, work it covers etc. Like I said, I would keep looking.

JBE · #3 10-13-2021, 02:05 PM

Not sure of any legal requirements but I would never give a deposit. I may progress them some cash when material is on site.

Albertadiver · #4 10-13-2021, 02:09 PM

Quote:

Originally Posted by Dean2

Alberta has no protection for Consumers putting down a deposit. Contractor goes under or runs off, so does your deposit. I refuse to provide any deposit to any contractor. If they are too small to do the job without me putting money up front I keep looking. Only thing I have done for a guy that was just starting out is paid the supplier direct for materials that were delivered to my location.

If you do put one down, at least do it on your credit card. Then you have some ability to pursue for non-delivery but make darn sure the contract is VERY clear on deposit, refund, work it covers etc. Like I said, I would keep looking.

This.

Any request for deposit, walk away.

Any CCDC contract will stipulate that the constructor may submit for payment once materials are on site; (sometimes have to be installed as well) or under the owners care or in an agreed bonded warehouse.

Elevator companies are notorious for demanding deposits before they'll lift a finger.

MyAlberta · #5 10-13-2021, 02:17 PM

Deposit or no work. I thought only amateurs committed to a job without the client committing to them. Took a couple hits early but corrected that quickly.

Twisted Canuck · #6 10-13-2021, 02:28 PM

From a contractor's point of view, there are clients that I wouldn't work for without a deposit. That door swings both ways, it's not just contractors screwing homeowners, plenty of contractors have put in material and labour and had to eat it.

I have used a simple formula in the past. I supply material (drywall and finishing), and I am there to supervise delivery and placement, and the homeowner is there with a cheque for a third of the quote. I will then have board installed and get it taped, and get a cheque for another third. Then, I finish coat, texture and sand out and clean up so it's ready for paint. I do the walkthrough, and get the last third in my hand.

That way, the owner has confidence things are getting done, and the first two payments cover my costs (mostly) other then my labour. Everyone usually feels good about this approach.

I have had one customer come to me when the material was just delivered, and tell me they were going on vacation, so they paid me upfront for the whole job (based on a reference and my reputation). You can bet the job was done, and done well, when they came home, and there was a fruit basket and a thank you card there for them too.

Always try and get references, and check them.

Dean2 · #7 10-13-2021, 02:40 PM

There is a VERY big difference between progress payments and up front deposits. I have no issues with progress payments like TC described, particularly on larger jobs and I am aware that contractors get stiffed regularly by clients too. However, a contractor can at least file a lien, the consumer has zero recourse. That said, any contractor that thinks I am going to give them money up front, and I have had requests that range from 15 to 75% of the job, are seriously deluded.

MyAlberta, I have to question what commitment you think you have demonstrated by quoting the job, that causes you to expect the client to pay you up front just because you deign to take on their job. I don't recall anyone ever applying for a job I had advertised and then asking me for 2 weeks pay up front before they even started work.

Grizzly Adams1 · #8 10-13-2021, 02:59 PM

The official version.

https://www.bluejayrenos.ca/blog/202...sed-contractor

Grizz

Dean2 · #9 10-13-2021, 03:03 PM

Quote:

Originally Posted by Grizzly Adams1

The official version.

https://www.bluejayrenos.ca/blog/202...sed-contractor

Grizz

What you post is true in theory. I have yet to see a contractor that adhered to this law, and I have dealt with lots of them. There is obviously zero enforcement on this.

58thecat · #10 10-13-2021, 03:07 PM

If it’s a labour job I pay half up front and the other half when the job is done.

If it is a job that requires items to be delivered and held at my residence then I pay for them after it is dropped off.

When they show up to start the project I pay half up front and then the remainder upon completion.
I also dig to see credibility in a contractor.

Sent from my iPhone using Tapatalk

Twisted Canuck · #11 10-13-2021, 03:15 PM

I think Dean and I are singing from the same hymnal. I also wouldn't put anything down before material at least was on the job.

It's a savage world out there, both for consumer, and contractors. Putting a lien on a place sounds like it protects the contractor, but I have yet to meet one who actually recovered the entirety of what he was owed. And usually it's such a long drawn out process, that it kills your cashflow. Just like clients who want to pay at 90 or 120 days, instead of 30. I'd love to run my business off somebody else's line of credit, and not have to cover the interest.

Anyway, get references, and check them. That's the best advice to follow.

Edit: I will qualify my opening comment about *NEVER* putting money down. I once prepaid for an entire cabinet package and install, in the house I am now living in. I knew the cabinet builder, he had done a set for my previous build and I knew he was absolutely honest (and not going out of business, he was in high demand). I asked if he would discount if I prepaid (thinking I might get a couple points off). He discounted it 5%, because the cash flow was going to help him. I saved $1500, and got a beautiful job that I am still happy with. I paid him 6 months before the install too. It worked out for both of us.

MyAlberta · #12 10-13-2021, 03:48 PM

Quote:

Originally Posted by Twisted Canuck

I think Dean and I are singing from the same hymnal. I also wouldn't put anything down before material at least was on the job.

It's a savage world out there, both for consumer, and contractors. Putting a lien on a place sounds like it protects the contractor, but I have yet to meet one who actually recovered the entirety of what he was owed. And usually it's such a long drawn out process, that it kills your cashflow. Just like clients who want to pay at 90 or 120 days, instead of 30. I'd love to run my business off somebody else's line of credit, and not have to cover the interest.

Anyway, get references, and check them. That's the best advice to follow.

Edit: I will qualify my opening comment about *NEVER* putting money down. I once prepaid for an entire cabinet package and install, in the house I am now living in. I knew the cabinet builder, he had done a set for my previous build and I knew he was absolutely honest (and not going out of business, he was in high demand). I asked if he would discount if I prepaid (thinking I might get a couple points off). He discounted it 5%, because the cash flow was going to help him. I saved $1500, and got a beautiful job that I am still happy with. I paid him 6 months before the install too. It worked out for both of us.

Sure, depends on the capital. Big items you take your contract to the bank, or at least have it to be comfortable financing it personally. which is the crux of small business. For many of them, who can provide excellent value, it’s too simply too risky. Functioning contracts cost money to create and enforce.

Twisted Canuck · #13 10-13-2021, 04:49 PM

Quote:

Originally Posted by MyAlberta

Sure, depends on the capital. Big items you take your contract to the bank, or at least have it to be comfortable financing it personally. which is the crux of small business. For many of them, who can provide excellent value, it’s too simply too risky. Functioning contracts cost money to create and enforce.

That particular situation, I wrote a cheque for over $30K on a handshake, and never lost a minute sleep. There have been a few (very few) dealings I have had that were similar in nature, as to fronting $ on a handshake, and I've not been burnt for the most part, but I'm not foolish about doing it. The one time I knew I was going to be burnt, but a friend needed a couple grand and I knew he would never be able to pay it back, but he kept insisting it was a loan. I wish he would have accepted it as a gift, because he ended up feeling so bad about it he broke contact with me, even though I told him not to sweat it.

Grizzly Adams1 · #14 10-13-2021, 04:55 PM

Quote:

Originally Posted by Dean2

What you post is true in theory. I have yet to see a contractor that adhered to this law, and I have dealt with lots of them. There is obviously zero enforcement on this.

You're right too, but that at least gives you a leg to stand on if things go south. I've been in the contracting game for 30+ years and I never asked for a deposit up front, though it was offered. Difference being I'm a member of the community as were my clients and reputations get around. If you give Joe Blow, who shows up at your door out of the blue money, you are asking for trouble. I've got to go to Three Hills tomorrow, to deal with a dispute over some stairs my son's MIL had built by the Hutterites, not as promised and not up to code. I suspect if she gave them a deposit she's SOL.

Grizz

Dean2 · #15 10-13-2021, 05:15 PM

I have had epic arguements and issues with a few contractors that have come highly recommended and that I checked out 6 ways to Sunday, I have also paid at least a few contractors more than they billed me because I didn't think they charged me enough for the great work they did. I have also done, without exaggeration, multi million dollar deals on a hand shake but it was NEVER with anyone I did not know and have a long history with.

I have never screwed a single person on a deal, nor have I ever allowed anyone to screw me, even if it cost me 5 times as much as I gained to exact justice on their azz. All of that however doesn't help the average guy who won't or can't go to the extraordinary lengths I will to make sure stuff goes the way it should.

Long and short, no matter how well u check someone out, there is no replacement for experience. Once u find a good and honourable person to deal with, stick with them. Price is important but it isn't everything.

Twisted Canuck · #16 10-13-2021, 06:25 PM

And that ^ is also true Dean. Some guys *had* a well deserved good reputation, and for whatever reason (usually booze drugs or debt in my experience) can go shady. Then a reference can get you in trouble.

Ronji · #17 10-13-2021, 08:49 PM

I have been in the home renovation industry for many years.
We have our prepaid contractors license, WCB, Liabilty Insurance, etc. etc.
We always take a deposit. I probably would not ask a deposit on a $4000.00 job though

You guys must have really been screwed over based on your comments. I have been screwed over by customers as well.

Long and short, no matter how well u check someone out, there is no replacement for experience. Once u find a good and honourable person to deal with, stick with them. Price is important but it isn't everything.

That statement very precise Dean. Wish I could have said it.

ÜberFly · #18 10-14-2021, 12:12 PM

Thanks everyone for your advice and suggestions...

I will take it under consideration!

Peter