Repost-deposits-payments-laws

[Account Closed]

I wanted to re-post this and hope it is of help to the group.
Here is my input on the subject. I am a State of California licensed contractor with 20 plus years of experiance.

As far as a DEPOSIT, California only allows a contractor to receive 10% deposit PERIOD! Then he can ask for progress payments as a agreed upon percentage of the work is done. Get this in writing and be in agreement as far as percentage of completion , or milestones. The holding back of 10% until a determined time after the completion is common on commercial work and ALL government work, but not very common on residential remodel, unless the work is financed and the bank requires this. Contracters are not real excited about waiting for completion check! Again if you wait to long, they can lien your property, and this reflects your credit report for 6 years. You never want to be labeled as a flake, as far as paying for improvements!

Before you hire a contractor, go on line to your States license board, and look for the rules and regulations in your state. Many states do not requre a license, but the contractor will be regulated by the local city and or county.

1. Always ask for License number, and check the status with the license agency.
2. Ask for a copy of liability Insurance as well as workman's comp certificates, and verify this information with the carriers.
3. Ask for a copy of the bond, if it is required by that state. This will be your ACE, should things go wrong.
4. Ask for at least 3 refferances, and call them. Ask if you can go look at the work! If the contractor did a good job and handled the business end well, his customers will be happy to do this.
5. If the job is large or high dollar, ask for and help pay for a "performance and completion bond", well worth the minor cost!
6. Upon each payment to the contractor, get a partial payment release for that portion. In most states the contractor has a statutory Mechanic's lien on your property, as does the workers and suppliers!

Hope this helps the group in general! BTW- I am phazing out of retail construction, and not thrilled to talk in lenght about contracting, but I will help with a sticky situation.

James