Does This Payment Schedule Sound Reasonable?

[Mr Sparkle]

I just wanted a second opinion on the payment schedule proposed by a builder for a loft conversion with Dormer Extension

Total cost of works - £44K
Duration 8-9 weeks

Deposit prior to work - £4K
Deposit by end of week 1 - £20K
Payment on completeion of main construction - £17
Final Payment of completion of works (i.e. plastering/2nd fix/electrics) - £3K

Materials and scaffolding arranged by builder

 

[ETAF]

Is that your suggestion or the builders

I'm just a DIYer , and have limited experience , but I have recently had various builders in for various works, flat roofing, Facia/Soffits and roofing Insulation , Kitchen refit, Bathroom&Ensuite, electrics house re-wire, plasterers etc
I usually keep a little more back on completion 10% or so - So maybe 4-5K
How long is the Job Quoted to take?
50% after week one maybe a bit high , BUT if that assumes ALL material onsite.
I expect builders to have trade accounts and probably pay contractors weekly, also is scaffolding involved ?, so payment schedule taking into account some of the builders outgoings maybe a consideration.
10% deposit to keep the slot and for work to start, I have often paid that. Although 1 builder for the bathroom, where we supplied most of the main materials did not need a deposit, But I suspect that would vary by builder. Also getting a builder at the moment is very difficult, so if a deposit secures the date & time of work starting , and a deal they stay on site to complete when they have all the materials available. I made sure this was the case on ALL my quotes , as i have had experience and know where the job goes on for a long time, as builders not on site for long and missing days in the week.

 

[thomp1983]

I wouldn't be happy with that at all, by the end of week 1 you've given him over 50% of the money, he could easily walk of the job and be well off.

As etaf has said he should have trade accounts so shouldn't need the money for materials, 4 month job I'd agree to pay 10k a month at the end of each month

 

[Mr Sparkle]

Thanks for the input guys

Just a bit of further info

The builder states that the dyration of the job is 8-9 weeks

If they go over the quoted time then they will impose a penalty upon themselves of £550 per week (i.e. they will give this back to me)

All materials and scaffolding is arranged by the builder

 

[Mottie]

If they go over the quoted time then they will impose a penalty upon themselves of £550 per week (i.e. they will give this back to me)

So if it runs over, they’ll work for nothing and give you money to do so? By then they would have £24k of your money. I’ve never heard of a builder working for nothing and giving money back to anybody. I’d look at a different schedule.

 

[ETAF]

Payment on completeion of main construction - £17K

I wonder what "completion of main construction" means

By then they would have £24k of your money

So they probably will have 41K paid, as main construction may not include 2nd fix , and then they agree to payback £550 free work.
Interesting , do you have a full contract and understanding of What exceptions apply for the time ?
Have you seen examples of the work, do they come recommended

 

[Diver Fred]

Think I'd want a detailed payment schedule* before I'd agree to that.
* breakdown including labour costs, materials and their suppliers.

OK, can live with the deposit as it does seem to be very common in the trades nowadays if only to make sure a start date (week/month) is agreed.
If the builder has to pay for stuff up front (scaffolding and council charges) then I'd expect to cover that or pay direct.
Materials - the builder ought to have trade accounts with at least 2 or 3 suppliers (not DIY barns...) whose terms are normally 30 days. So if his cash 'flow' is poor then maybe I'd make a payment after delivery of materials (say between 7 and 15 days).
On a long duration job I'd expect stage payments for labour costs as well but always slightly in your favour. (a 'rule of thumb' on labour costs is twice the material cost.)

What is so difficult at present is the world-wide shortage of materials and some suppliers are only supplying on up-front payment, even to their account customers. What you make also find is that you have more materials on site than what is actually needed/used as builders are using where they are working as their own storage facilities.

My suggestion is a total of £15K by the end of first week (that is £4k deposit, £11K balance)
then £6K at the end of each month with final balance (£5K) one month after completion. All payments on dependent on full attendance to site.

 

[Old Salt]

Had an extension years ago with following schedule

materials on site 25%
Roof height 50%
Completion 15%
4 weeks after completion final payment 10%

 

[opps]

Did you stipulate the time limit or did the builder? If you didn't, I don't understand why he has (potentially) imposed penalties upon himself.

My GF used one of "those" sites that promise to provide you with reputable tradesmen. The guy that was supposed to build the bathroom took £4k for the sanitary ware in advance.

On the upside, given that no work had been done, she was out of pocket but still had a functioning bathroom.

The pr@t worked for my stepson previously. His work was chuffin awful. I had to turn up later to unblock the pipes full of grout.

 

[opps]

https://homeowneruk.wordpress.com/

If you ever have a guy called Toby Smith from Harefield turn up, consider looking elsewhere (note to Mods- AFAIK that is covered by Fair Comment - tnx)

 

[HERTS P&D]

Ask Noseall what it should be.

Andy

 

[noseall]

Ask Noseall what it should be.

Andy

We never ask for more than the value of the work done and materials on site.

 

[mrrusty]

We never ask for more than the value of the work done and materials on site.

This

There is never any need to pay any advanced payments, other than perhaps a small "goodwill" deposit so both sides know there is commitment.

 

[m0t]

Recently had a dormer extension done which cost £54k. The quote was broken in to stages and the invoices issued after I'd been walked around to show that the stage had completed.

Payment schedule was:

• £4k on construction of scaffolding.
• £5.5k on completion of strip out and installation of steels.
• £3.6k once floor joists had been installed and all other timber delivered to site.
• £11.4k on completion of all timber construction
• £11.4k on completion of all roofing
• £1.5k for first fix electric
• £4.1k on completion of all plasterboard and insulation
• £3k on completion of plumbing
• £3.6k on completion of plastering
• £4.5k on completion of rendering
• £1.2k on completion of all electric
• £1.2k on completion of outstanding carpentry.

Took about 5 weeks but didn't include fitting the bathroom, skirting etc. The structural payment and the insulation one were made after Council inspected.

 

[JP_]

Deposit prior to work - £4K
Deposit by end of week 1 - £20K

No.

No reason they need £24K in the first week of a loft conversion