Don’t Pay Contractors Up Front!

I am constantly hearing stories that galvanize me to my cause.

The other day, I was talking to a client who told me this….
My client’s elderly mother wanted to have the exterior of her house painted. So she contacted a local painter who had come somewhat recommended, and asked him to come take a look and please give her a price. He gets there, they meet and talk and he says it will cost $3000, and we need to have half up front. She asks for references, which he gives her. She calls them to inquire, to which they apparently tell her the guy is great. She meets with him and says she can pay for it all up front, and Apparently, he says “No, No half is fine”, but she insists. So he walks away with the $3000. A few days goes by and ‘mom’ calls him to find out what’s going on, and he tells her he is getting materials together, and then he never shows up to do the work. My client ends up having to chase the contractor down, files a complaint with Better Business Bureau, and takes him to small claims court. After months of time and despite their win, the guy is still out there doing business and has yet to pay the money back. The money… Gone. The time… Gone.

This is the kind of story that you hear from time to time, that I hate to say I could have saw coming. Sure they can press on, spend more money, more time. Get an attorney; go back to court; get an injunction; pay the sheriff to go collect and on and on…

The real lesson is this: Keep the money in your pocket until the work is satisfactorily completed. Remember, money equals incentive. If you have the money, the contractors’ incentive is to get it from you. Some may try to talk you out of it, most will work for it, many will work both angles to some degree. The bottom line here is that maintaining control of the money will help ensure you maintain control of the project. Generally speaking, if you give up the money, you give up control. If you absolutely feel you must pay the contractor something up front, my suggestion is to limit it to $1000 or 10% of the contract amount; whichever is less.

© 2011 – 2012, RCartright. All rights reserved.

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