HIRING A CONTRACTOR
What is the Standard Rule for Down Payment?
A week does goes by without someone calling and asking what the “rules” are on upfront payment for a construction job.
Your well respected contractors, those that know how to manage cash flow should have well established credit with their supplies and should have payroll processes in place for the employees. It is reasonable to expect to pay something up front and the standard rule in Yavapai County seems to be anywhere from 30 to 50 percent. Do not ever pay a deposit in cash, always obtain a written receipt and a contract and make sure that your contractor has a license. If he does not, he is considered a handyman and your job cannot exceed $1,000. You should not be expected to pay for the job before the work is complete and on the other hand, it is not fair to make the contractor wait for payment until after the job is done. Both parties have an obligation and responsibility to one another. It is also important to make sure that your contractor is paying his subs and suppliers. Ask for lien releases, both partial and final. These releases are your proof that the contractor has paid met his obligations and paid his suppliers; therefore a mechanic’s lien cannot be placed on your property.