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

I'll Be on "Real News with Rick Outzen" This Morning at 7:10 Discussing the Contractor Competency Board

I've been invited to appear on the area's #1, top rated, and most informative morning drive news radio program "Real News with Rick Outzen" this morning at 7:10.  The discussion will center on the efforts to reform our Contractor Competency Board an process for oversight and licensing of contractors by this board.

 I've been invited to appear a little later this morning on 1370 WCOA's "Real News with Rick Outzen" Radio program.

Rick has invited me on to discuss what the BCC's direction was after last Thursday's meeting with respect to the Contractor Competency Board.

At Thursday's meeting, the board gave staff direction and a number of initiatives were discussed for implementation going forward to hopefully prevent what we have seen recently with several contractors scamming citizens out of large sums of money and never doing the work that was proposed by such contractors.

It should be an interesting conversation--when Rick publishes the podcast, I will link it here.

On 1370 WCOA's "Real News with Rick Outzen" Later this Morning

I've been invited to appear at 7:10 this morning on the area's best, most informative, highest rated and entertaining morning drive news radio program "Real News with Rick Outzen" on 1370 WCOA.

After an action-packed Committee of the Whole yesterday, I am sure we will be discussing the hiring of Wes Moreno as our administrator next week.  We will more than likely also discuss the Board's direction on issues of homelessness and the Contractor Competency Board--if time permits.

It should be a good discussion.  When the podcast is published, I will link it here.

About the Contractor Competency Issue....

A number of citizens have rightly expressed concerns about a couple of licensed contractors in the County who have not finished work and who have accepted large up front fees for such work and not paid customers back the money.

It's been all over the press and Facebook.  Folks are angry and upset.

After speaking with staff today on this issue particularly, I am told that if restitution in the amount of $62,052.42 is not proved to have been paid back to customers by Banks Construction, Inc., by August 10th--Wednesday--this firm's license will be immediately suspended and this company will not be able to any work which requires this license--- nor will they be able to pull any additional permits.  In addition to this restitution, I'm told this firm owes fines in the amountof $16,379.56 that must be paid by 9-1-2022.

There are additional customer complaints on this particular firm--this $62,052.42 represents the first group of complaints..

I am told there is one more firm who also has had a number of complaints for non-performance and non-payment and this firm must also pay restitution or have their license suspended.  I will be getting more information on that company tomorrow, and I will post that here.