When one is worried about getting paid...

[Goldspoon]

I have a large job (large for me anyway) to do. I have quoted and client has accepted. Job is boiler plus five rads in a flat. Bathroom in same flat and bathroom in flat above. Bathrooms very basic wc, basin, bath cheap and cheerful.

Building is vacant and rather dishevelled. Purchaser lives elsewhere and will be renting the two flats to tenants.

I have asked for 50% up front, 25% at end of week 1 and 25% at end of week 2 at end if job.

He is not happy about this. He says there is risk both ways (I agree). However, to me he is a landlord (high risk I think) and has a vacant prop (again high risk).

He wants to pay for materials for week 1 and then, at end of week 1, give cheque that will cover costs of week 1. Then he gives cheque for half of week 2 followed by rest iof week 2 at end.

My problem here is that cheque will clear after whole job is done. If it were to bounce he has everything done and installed for just 25% of the overall price and I would have to chase for 75%. Too much risk for me.

What does one do?

Is there not a scheme where customer passes money to "middleman" who holds money until job is done to satisfaction of both parties and who then mediates if there is a problem ?

 

[WoodYouLike]

You buy all the materials. Do you pay your supplier straight away or do you have an account?

50% upfront is reasonable; you have to source, arrange, collect et all the materials.
If he's not happy with that and you think the risk is too large, step away.

Or have him pay all materials (get them all in then, if possible, for all weeks in week 1) upfront. If you're worried about bouncing cheques: ask for cash.

 

[Goldspoon]

You buy all the materials. Do you pay your supplier straight away or do you have an account?

Thks for reply. I stay away from accounts and pay as I buy. However, this is about risk rather than cashflow.

 

[WoodYouLike]

Ok (although lack of cashflow is a very great risk when you've bought all the materials and he's not paying you or the cheque bounces)

Ask for cash then, or get one of those mobile card payment machines

 

[dave.m]

Goldspon,
You could take the cheque directly to your bank and ask for 'special presentation'. It will cost about £12.

http://tinyurl.com/yaeta7p

What is special presentation or special clearance?

If you're the beneficiary (i.e. payee) of a cheque and you wish to know as soon as possible whether it will be paid, you can ask your bank to present that cheque specially. The bank then sends the cheque by first-class post directly to the paying bank, contacting them by phone on the following working day to confirm whether it will be paid.

You may not receive the funds any sooner, but you will have the knowledge that the cheque has been paid before the end of day 6.

 

[bathstyle]

I tend to do a minimum of 2 weeks work per job.

I think the Landlords offer of payment is reasonable actually.

I always get a deposit for the work which is generally a token amount just to make sure they don't cancel the day before I start. I either get a stage payment at the end of the first week which covers labour and then get the full amount at the end of two weeks for the final amount.

I encourage all customers to by via BACS

Edit: just to add, I always pick up a cheque/BACS when the materials are delivered on site.

 

[Mark Br]

My terms are - 30% upfront (received in time to clear before you pay for goods), 30% mid way, balance immediately on completion.

 

[^woody^]

Get the materials (or the first weeks materials) paid for before the job starts.

When he gives you the cheque for your work at the end of the week, get it Friday afternoon early, and go straight up the bank and pay to have it express cleared - so will clear by Monday afternoon. Or ask for cash and offer a slight discount

 

[Goldspoon]

I have offered the following (which reduces my risk to one week of labour/overheads):

Job 1. Week 1: Installation of central heating

Deposit up front to cover materials
Balance to be paid at end of week 1

This job is then considered to be complete.



Job 2. Week 2: Installation of two bathrooms

Deposit up front to cover materials
Balance to be paid at end of week 2

The job is then considered to be complete.


I suppose my internal instinctive alarm bells are ringing and, in my experience, one should listen when this happens.

 

[bathstyle]

Gut feeling goes a long way, the last time I had it was with a property developer, I did one job for him, paid bang on time, second job he just didn't pay, he went on holiday, I googled his name and it turned out he was involved in a £20M Ostrich mean scandal, he coughed up in the end. True story, Google 'Ostrich Meat Fraud'

It could only happen to me

 

[namsag]

I dont take penny till job completly finished but that is for public. Walked away from a few jobs for gut feeling. And was proved right
Wont do any work for builders unless they are close mates, you hear of too many builders/developers ripping people off i dont blame you for trying to cover your a55 as much as possible.

 

[Mw Roofline]

Does he know how much the materials are costing? Work out the exact cost for materials and your labour for week one eg. 1.5k. Tell him 1.5 is materials only and he can pay you at the end of week one. He won't know how much the materials are costing as customers haven't a clue, then you can adjust the following weeks money accordingly.

To be honest, I wouldn't want to pay 50% up front. A regular tradesman should have facilities to obtain materials at his own cost.

Make sure your contract is all in writing and get him to sign a set of terms and conditions. Don't do anything verbally.

 

[roughcaster]

I dont take penny till job completly finished

Snap!!!

Roughcaster.

 

[namsag]

Or in one case a month afterwards when the woman phoned me and said your money is waiting for you when are you coming for it.
Bemused look on my face what money is that then, £700 .had completly slipped my mind.

 

[WoodYouLike]

Or in one case a month afterwards when the woman phoned me and said your money is waiting for you when are you coming for it.
Bemused look on my face what money is that then, £700 .had completly slipped my mind.

So, good heavens for decent customers