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My thought is that they asked for 1/3 down which may cover a decent portion of the materials because, even though they have the working capital to cover the cost of the materials up front, they may want to cover themselves in case the client decides to "stiff" them. At least then they would only be out the labor cost while trying to collect.
And yes, I know that they can use their established credit to purchase the materials on their account, but they still need to pay their supplier when the bill comes due.
Location: Stuck on the East Coast, hoping to head West
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Quote:
Originally Posted by Electrician4you
Usually states have laws on how much a contractor is legally able to take to start a job. Rarely is 1/3 of the total cost a legal amount. For example in California it's 10% or $1000 bucks whichever is less.
Check on your state contractor laws.
It sounds like this cintractor is looking to cover all or most of his material costs. We're there any progress payments detailed in the contract? That is something else that should be detailed.
If a roofing contractor has been in business for 30 years, this should not be the case.
You would be surprised how many long lived businesses still run hand to mouth
Quote:
Originally Posted by rrtechno
My thought is that they asked for 1/3 down which may cover a decent portion of the materials because, even though they have the working capital to cover the cost of the materials up front, they may want to cover themselves in case the client decides to "stiff" them. At least then they would only be out the labor cost while trying to collect.
And yes, I know that they can use their established credit to purchase the materials on their account, but they still need to pay their supplier when the bill comes due.
The client CANT "stiff" them. There is a legally binding contract that IF written correctly it spells out the scope of the work AND payment for the work. Yes they need to pay their supplier you're right. That's their problem not the consumers. And when the work is done (bet you didn't know this) you as the homeowner better get what is known as a release of lien from EVERY contractor you hire for jobs. The release of lien protects you from the supplier coming after YOU when the contractor decides not to pay them for the supplies. (Even if you paid them in full if they don't pay their suppliers the supplier can come after you.)
Quote:
Originally Posted by bande1102
No, there weren't any progress notes, either.
So how do you pay him? What stop him from delivering materials and demanding full payment before work is started
Location: Stuck on the East Coast, hoping to head West
4,640 posts, read 11,937,291 times
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Quote:
Originally Posted by Electrician4you
You would be surprised how many long lived businesses still run hand to mouth
The client CANT "stiff" them. There is a legally binding contract that IF written correctly it spells out the scope of the work AND payment for the work. Yes they need to pay their supplier you're right. That's their problem not the consumers. And when the work is done (bet you didn't know this) you as the homeowner better get what is known as a release of lien from EVERY contractor you hire for jobs. The release of lien protects you from the supplier coming after YOU when the contractor decides not to pay them for the supplies. (Even if you paid them in full if they don't pay their suppliers the supplier can come after you.)
So how do you pay him? What stop him from delivering materials and demanding full payment before work is started
It pretty much summarizes everything else I learned when doing research. Basically, don't put anything down unless it's custom or a very large (multi-day job), only pay after the job is done, and get a detailed contract that, yes, includes start and end dates.
What a lot of you do not understand, is that when the roofer is having to face weather problems, and having other jobs that have to be completed before they can start a new job, they have told you that in 2 weeks, they can give you a date to get to yours.
Three years ago, we had to replace our roof. It was paid by the insurance company after a bad ice storm that ruined over half the roofs in the county. It took almost 3 months, to get to where they could do our roof, they had booked so many jobs, and other roofers were even worse as all were so many jobs to get to.
A 30 year old company with a good reputation, is nothing to sneeze at. If a company can give me a definite date to start when they make the contract, usually means they don't have much work, and do not have the support of customers that your roofer has and certainly are not busy. As to the end date, if it is a one day job, then the start and end date are the same day.
I spent from 1972 till I retired as a investment real estate broker, and had many roofs put on houses over the years. For me not being able to get a start date for a couple of weeks after booking the roofing job, is not unusual. If it is a top roofer who will be busy, it is kind of standard to have that happen. A roofer that can give a definite start date the day you book the roof, just means they are not busy and do not have to finish other roofs before doing yours. A good roofer can give an approximate date at best, due to unforeseen problems with some roofs that take more time, and having to take weather into consideration.
Location: Stuck on the East Coast, hoping to head West
4,640 posts, read 11,937,291 times
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Quote:
Originally Posted by oldtrader
What a lot of you do not understand, is that when the roofer is having to face weather problems, and having other jobs that have to be completed before they can start a new job, they have told you that in 2 weeks, they can give you a date to get to yours.
Three years ago, we had to replace our roof. It was paid by the insurance company after a bad ice storm that ruined over half the roofs in the county. It took almost 3 months, to get to where they could do our roof, they had booked so many jobs, and other roofers were even worse as all were so many jobs to get to.
A 30 year old company with a good reputation, is nothing to sneeze at. If a company can give me a definite date to start when they make the contract, usually means they don't have much work, and do not have the support of customers that your roofer has and certainly are not busy. As to the end date, if it is a one day job, then the start and end date are the same day.
I spent from 1972 till I retired as a investment real estate broker, and had many roofs put on houses over the years. For me not being able to get a start date for a couple of weeks after booking the roofing job, is not unusual. If it is a top roofer who will be busy, it is kind of standard to have that happen. A roofer that can give a definite start date the day you book the roof, just means they are not busy and do not have to finish other roofs before doing yours. A good roofer can give an approximate date at best, due to unforeseen problems with some roofs that take more time, and having to take weather into consideration.
I'm glad that things worked out for you. Curious, were you putting money down before the roofing job even started?
High down payment + no approximate start date = an extremely common roofing scam. I'm not willing to take that risk.
The roofer was never able to explain why I'm fronting him so much money to begin with, either. My roof is not a custom roof nor is the job going to last more than a day. In all the years of owning houses (20 years), I've never had to put money down unless it was custom material or a projected that lasted more than a few days. And I've had some large repairs, too. I'm pretty sure I put my plumber's son thru college.
As far as a start date goes, I get what you're saying. I'd be fine with the roofer calling me in a few weeks and telling me the start date. Show up, do the job, and I'll pay you. But I'm not letting him hold my money during that wait time.
As it turns out, I've got some other bids that are competitive and don't require down payments. They have projected started dates with clauses about weather. I'm okay with that and I'm going with one of them.
I was in the business for many years. In my opinion, (and we collected 50% up front) , you don't pay the 1/3 down until they show up with materials on site and start work. An established contractor should have a line of credit with suppliers so the material costs he doesn't even need cash to cover. He shows up with materials he charged on his account, starts work, you give him his 33% down and he can take that and pay his bill due in 30 days.
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