When Is More than a 10% Deposit Justified for Cotracted Repair/Installation Work?

According to one detailed email I received--there are legitimate explanations for some contractors to require more than a 10% down payment for some jobs.  Read his rationalization/explanation below....

We all know what is going on with a number of contractors in the community who have taken huge deposits from homeowners for work on houses and then not completed any work on the projects.  It is horrible, and EVERYONE is horrified, angry, and wants justice.  And justice will be served I believe.

Meanwhile we are all looking for ways to better protect citizens from unscrupulous actors who will always be present in a free society.

To that end, we have had several meetings on this topic and have discussed the many ways in which we are going to modify our practices with respect to licensing, investigating, and punishing those who prey on fellow citizens.  We are also working on fixing issues on the contractor competency board which have been discussed heavily in the media already, multiple times.

BUT HOW MUCH SHOULD A HOMEOWNER PUT DOWN ON A JOB?

At one of our recent meetings, the question was put to our director of building services, Tim Tolbert, from the board:  "How much is a standard deposit for a contractor?"  To which Tim replied "Nothing or no more than 10 percent" (paraphrased)

Is that always the case though?  I received an email recently from one area contractor that does specialty work for property owners and he has a rational explanation for jobs that require more than a 10% down payment.

From the email:

"Hey Jeff. The construction industry depends on deposits being given to contractors. And has always been this way. It is part of a trust process the contractor needs. 

 I build xxxx  xxxxxxx  xxxxxx and with an estimate I require half down with the balance upon completion. The reason is because if I get half I know I will get the other half later. With every estimate, I send along a referrals list with about 30 names, phone numbers, addresses and emails attached and ask the prospective customer to contact three from that list. 

 Say I do an estimate for you and the xxxxx is just over $xxxxxxx. The materials from Lowe's are going to cost around 60% of the estimate so the deposit I get from you doesn't even cover the materials. I pay the difference. Myself and my crew do the work, which is custom xxxxxx and custom xxxx. It is built to be a permeant fixture of your xxxx xxx xxxxxxxxx. 

 Basically, I put in my own money to cover the balance of the materials and do the work without making any money until I am completed. Then, I get paid. 

 Let's say you refuse to give me half down. I agree to do the job. The xxxxxx are set in xxxxxxxxx. The

Lane Closures (Nightly from 7PM - 5AM for four days) Possible Next Week on Beulah Road

Area of potential lane closure 7PM-5AM daily for 3-4 days (and proposed detour route) for construction commencing next Monday in Beulah to add improvements and signalization to the intersection of Mobile Highway/Beulah Road

As the project to provide a signalized intersection at Mobile Highway at Beulah Road moves forward, several evening's worth of construction may necessitate the closure of a section of Beulah Road from 7PM-5AM for 3-4 days potentially beginning next Monday, June 4th.

At this point this information is tentative, however due to the construction planned for this section of the road I believe this will happen.  From the contractor's email:

"we have been contracted by the FDOT to perform the intersection improvements at SR 10A (US 90/Mobile Hwy) and CR 99 (Beulah Road), Contract No. E3R02... Our first work activity involves the installation of three (3) 18” RCP pipe crossings under Beulah Rd north of Mobile Hwy. Reference the attached Plan Sheet for specific locations. We reviewed installing the crossings half-way across the road in one operation and under a lane closure. It was discussed that due to the existing, narrow 10’ lane widths on Beulah Rd and little to no grass shoulder, the movement of traffic through the work zone would be unsafe due to the existing drop-off hazards presented by the existing ditches along Beulah Rd. We are proposing the implementation of nightly road closures on Beulah Rd from Mobile Hwy to Beulah Church Rd. Please reference the attached drawing representing the requested road closure. The drawing provides the anticipated work zone and area of closure as well as the proposed detour.  In addition, we are coordinating with ECUA to adjust their existing water main on the west side of Beulah Rd during our proposed road closure as their water main is approximately only 1’ from the existing edge of pavement.  Please review our request for County approval of a nightly road closure of Beulah Rd from Mobile Hwy to Beulah Church Rd for approximately 3-4 days tentatively starting 6/4/2018. The excavations will be backfilled any drop-off hazards addressed at the end of each work period to maintain traffic in its regular pattern during daytime hours."

Although nobody enjoys road construction delays--they are a necessary part of road construction projects.  I believe that once this long overdue project is completed at the very dangerous intersection, the small number of evening's worth of delays will have been well worth the inconvenience.