Tradies and paying for materials up front

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steve98

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#262259 13-Jan-2020 12:17

We have arranged via Builderscrack for a tradie to lay some pavers for us. He has ordered the pavers which will take 3 weeks to arrive but has invoiced us for them straight away. Should we pay in full or offer him half now / half on delivery and job started. Not sure what the norm is.

Cheers!

networkn

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#2390954 13-Jan-2020 12:23

I have had a really bad experience with pavers in Auckland, ended up on Fair Go. The guys name isn't Guy is it?

Google Guy Silcock

I'd be careful paying upfront for much any more.

steve98

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#2390957 13-Jan-2020 12:29

No, we’re in chch and different name. He has multiple very positive reviews to be fair so risk is probably low but still I don’t want to do anything I might regret.

Linux

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#2390961 13-Jan-2020 12:35

I would only offer 50% if the goods are not on site

eracode

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#2390973 13-Jan-2020 13:03

Maybe unfair, but I would have thought that any experienced tradie with a good ongoing business track-record should have the wherewithal to obtain credit from suppliers. If that’s not the case and they have to pay upfront, it could indicate a perilous money situation, or supplier has had trouble with them paying in the past. I would be wary.

Sometimes I just sit and think. Other times I just sit.

networkn

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#2390977 13-Jan-2020 13:08

Builderscrack has a rating system from memory, but you could also check said tradesperson on NoCowBoys.

Like everyone else said, I'd be being just a wee bit careful and I'd limit how much I paid upfront. Perhaps something might be reasonable, but not all of it.

chevrolux

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#2390978 13-Jan-2020 13:17

A reasonable tradie would be open to 50% until the goods are at least delivered.

But they also may have just been burned a few too many times so make it policy to request full payment for materials.

I'd say just have the conversation and find out the reasoning. As above, if cash flow is an issue for them then avoid parting with your cash at all costs.

eracode

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#2390980 13-Jan-2020 13:24

Despite what I said above, I guess every trader has to start somewhere. Forty years ago, Mrs Code and I wanted to re-carpet our home - an expensive thing for us at the time.

We heard about a young guy who had just started a carpet business and he was offering sharp prices. He had - or more accurately, he could get - the carpet we wanted but he wanted us to pay up front. Because he had been in business for literally only a few weeks, we were wary and decided against going with him.

Turns out he’s still very much in business to this day and apparently has been quite successful - I still hear his ads on the radio. But we weren’t to know that at the time.

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networkn

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#2390983 13-Jan-2020 13:26

Until we got burned we were a lot more trusting. Interestingly, since our bad experience, no tradespeople have asked for materials upfront, but then the value of the items has been moderately low.

It could be legitimate, but I'd be wary. My view now, is whatever I pay upfront, I have to be prepared to lose.

antoniosk

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#2390984 13-Jan-2020 13:30

chevrolux:

A reasonable tradie would be open to 50% until the goods are at least delivered.

But they also may have just been burned a few too many times so make it policy to request full payment for materials.

I'd say just have the conversation and find out the reasoning. As above, if cash flow is an issue for them then avoid parting with your cash at all costs.

this has been my experience as well; depending on the size of the job, a deposit to allow them to start the job and also demonstrate you aren’t a risk. You also normally have so many weeks to pay invoices - 7 day invoicing is uncommon, it’s normally monthly

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Antonios K

billgates

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#2391002 13-Jan-2020 13:40

The pavers supplier would not be charging the tradie upfront specially if they are not in stock. I would wait for pavers to be delivered to your house, pay 50% and pay remaining balance once work is complete.

Do whatever you want to do man.

mclean

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#2391535 14-Jan-2020 10:26

Here's what happens in the commercial world - it may not be relevant to your smaller contract but it highlights the issues:

The problem is what happens if the contractor or supplier get into strife after you pay for the materials and before you get possession of them.

If the materials are still with a supplier then you lose your money for sure. This sort of payment would be an advance and is practically unheard of.

Once the contractor has the materials, payment is sometimes made if delivery to your site is not practical for some reason, but only after the materials are delineated in the contractor's yard and identified as belonging to you. Payment would be something like 75% of the value of the materials. But this is still risky, especially once a receiver is involved.

Once the materials are delivered to your property (but not installed) it's usual to pay 75% of the value of the materials. Then the materials are yours (but still under the contractor's care and insurance).

Asking for an advance is usually an indication that the contractor is short of cash.

McLean

richms

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#2391605 14-Jan-2020 11:55

Also often sole traders are running while insolvent but just don't know it yet. You don't want to be in a position where you have paid them for things, they have used that to settle other debts and now cant pay for the pavers for your place, because the paving supplier will not care when they do not supply things that you have paid for.

Also most uncertified trades are not really doing things right when it comes to the contruction contracts act, which also may end up screwing you over when things hit the fan.

Richard rich.ms

sen8or

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#2391728 14-Jan-2020 13:00

For larger jobs we regularly progress bill for work completed at the end of each month, but this is almost always only for materials on site or for labour actually completed, but then all our gear is on terms with our suppliers, so when our customer's payment is due to us, ours is due to the supplier. This is fairly standard trading in commercial construction.

For domestic work, I'd say unless the materials are on your site, your money should stay in your account.

fearandloathing

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#2391730 14-Jan-2020 13:06

From experience, I would only pay for materials delivered onsite.

Gordy7

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#2391731 14-Jan-2020 13:08

Pay by some sort of escrow intermediary....

https://www.buildsafe.co.nz/

If the goods turn up the tradie gets paid....

If the goods fail to turn up you get your money back...

Gordy