How common is it for a well established roofing company to ask for 50% of the cost before completing or even delivering the materials for the a re-roofing job?
It’s not only common with my company, in general, it is a requirement. Not because of cash flow needs but because there are just as many crooked Homeowners out there as there are crooked contractors. If someone has an issue with that, we have no problem letting them give us a check at the job site when the materials arrive.
It all depends on which state you live in. Check with your local building department, they will be better able to help you.
Here in California it is illegal for a contractor to collect more than 10% or $1,000.00 dollars, whichever is less. There would then be progress payments after that. NEVER pay in full until the work is 100% complete, permits and all. Get EVERYTHING in writing.
Thank you for answering my concern.
There’s California, then there is the rest of the world. I operate 4 offices in 3 different states and have operated in a fourth. There were no such laws restricting a deposit in any of the 4.
this is a standard for the roofing industry, the down payment is mandatory in order to start the job. To limit the amount of non paying customers
And, in the insurance payment world, the first check a homeowner has is generally not enough to complete the work. That means waiting with him for the insurer to produce the RCV check. It’s a fair trade to get 1/2 up front if you may have to wait 2-4 weeks (or more) to get paid after completion. Additionally, often times a mortgage company is involved in the insurance check, and the first indication that a homeowner may be behind in his mortgage is when the mortgage company refuses to sign the check. Better to know this up front than at some completion point where the homeowner just looks at you and shrugs.
Here’s a link to this exact problem:
Contact an Attorney.
We don’t do a lot of insurance work. We’re mostly dealing with homeowners directly. In Massachusetts there’s certain points we have to have on our contracts in order to be able to pull the permit. One of the points is that we are not to collect more than a third of the contract price unless there are special order items amounting to more than a third.
Most towns don’t enforce these, but quite a few do so keep it to a third and put the other points on our contracts too.