Ed Pawlowski wrote:
On Sat, 21 Jul 2012 11:47:23 -0400, "TomR" wrote:

Personally, I wouldn't do a deposit -- period. And, I definitely
wouldn't do a deposit, and then an additional payment at the start
of the job, on a one or two day job like this.

No deposit, no work for you. I'll be damned if I'm going to lay out
money for materials and bring my equipment and labor and show up to
find you've changed your mind. Easy to do since you have no financial
commitment.

Yes, there are sleazy, dishonest contractors, but there are many
sleazy, dishonest buyers too.

I understand what you are saying. This conversation comes up often,
sometimes here, but more often in other forums that I participate in --
mostly real estate investor groups with people who hire contractors all the
time.

Both sides have a point, and both sides have issues. In the past, I have
been the victim of contractors who were apparently better and more efficient
at taking deposits than in actually showing up and doing the work. In one
case, I was one of many people who ended up having to testify in a grand
jury investigation since the same contractor had done this to many people.
He was found guilty, but I never got my deposit back and he and his company
had no assets or income that I could collect on.

As a homeowner or property owner where the work is going to be done, I do
have a financial commitment in the fact that if I breach the contract and it
costs the contractor money, he/she can go after my fixed assets, attach my
income, etc. Of course, no contractor wants to be in the business of trying
to collect what is owed to them from a homeowner or property owner.

On the other hand, some (many) contractors operate as an entity which may or
may not have any assets and, in fact, may be insolvent or bankrupt. So, if
I give them a cash deposit up front, and they don't show up to do the work,
they may not have any assets or income for me to try to go after to get my
money back.

That's primarily, but not entirely, why I would not be willing to give a
cash deposit up front to a contractor.

However, I did say that I would consider (in some circumstances) paying for
the materials either directly to the supplier and having them delivered to
me in my name, or possibly to the contractor when they are delivered to me.
I am sure that you know that some contractors actually do a job and get paid
by the homeowner or property owner, but never paid their supplier for the
materials that they bought for the job using their trade credit. In those
case, the job could be done and over with and the contractor long gone, and
the supplier can sometimes go after the homeowner or property owner to try
to collect the cost of the materials.

Also, if a contractor buys say $3,000 of materials and shows up to do the
work, and the homeowner or property owner (who signed a contract) suddenly
"changes their mind" or says they don't have the money to pay for the
materials or the work, at least the contractor can return the materials.

And, yes, the contractor will have lined up a crew and brought equipment to
the job, and may have ordered and had a dumpster delivered to the site.
But, again, if those costs result in a loss to the contractor -- even though
no work was ever done on the job -- the contractor can take the homeowner or
property owner to small claims court, get a judgment, and put a lien on the
property and/or garnish the wages of the customer. And, while that is
certainly an undesirable outcome, at least the contractor has a means of
recovering his damages.

But, if I give a contractor a cash deposit up front with nothing securing
that money, I may have no way of ever getting my money back if the
contractor is a no-show.