Sure, you expect to pay a deposit to get your home improvement started but how much do you really need to pay?
Quite often when we receive a call from a homeowner that is looking for us to fix another contractors mistakes or problems. The conversation starts with the homeowner explaining that the original contractor already has most of the money that was budgeted for the project.
Never Pay More Than One Third of Contract
One of the most common warning signs that a contractor may not be reputable is contractors asking for large upfront payments or deposits that exceed state maximums.
In Maine, deposits cannot exceed 1/3 of the contract price. Maine Statute §1487. Home construction contracts states: “Any home construction contract for more than $3,000 in materials or labor must be in writing and must be signed by both the home construction contractor and the homeowner or lessee. Both the contractor and the homeowner or lessee must receive a copy of the executed contract prior to any work performance. This basic contract must contain the entire agreement between the homeowner or lessee”
Any contractor that asks for more than 1/3 down doesn’t know the law. Any contractor that says they need your deposit to buy materials is not a legitimate contractor. Legitimate contractors have accounts and credit at their vendors or the funds available to purchase those materials.
References – Signed Lien Waivers From SubContractors
Always get references on any contractor. Call local suppliers to see if they have a good reputation. Don’t just accept the references that the contractor supplies, do your own homework. Who would provide a reference contact that would say something bad?
NEVER let the contractor get ahead of you. Meaning, do not pay them for more work than they have completed. If they ask, say no.
Always get signed lien waivers from their subcontractors and suppliers. At the very least get a signed lien waiver from the Contractor for each payment you make to them. You never want a subcontractor or supplier to lien your home because the contractor didn’t pay.
Most contractors we know ask for much less than 1/3 down. Our attitude toward this is that we want to do such a nice job for you that you can’t wait to pay us for our work.
The truth is the vast majority of contractors out there do a good job and are reputable. If we are all diligent we can weed out the few that aren’t.