Down payment for Contractors

[Daniel Guerra]

Do you give a down payment to a Contractor before he does work? 

I'm having a hard time finding contractors that would do work without a down payment. 

I feel like even with a contract, a contractor could just walk away. Then you would have to go to small claims court to get that money back and pay an attorney.

[James Hamling]

@Daniel Guerra I owned and operated construction companies for a great many years, I never once would accept a job without a down payment. And as a property owner would start acting weird about paying, the size of that down payment would increase, considerably. 

If you are doing it right you A) have a detailed contract and scope of work, including payment schedule. That is your first line of protection. Then you B) are only working with licensed legal professionals. As they are licensed, you have the regulatory body you can go to for any help if a person tries to burn you and it can cost them there license. And C) in most jurisdictions licensed contractors have to carry some sort of bonding, be it personally or through the licensing agency. In MN it is through the licensing body, and it pays up to $25,000 to property owners who get screwed by a licensed contractor, it is called the Contractor Recovery Fund, a rather common thing for licensed professionals. 

So in that sense, no, there isn't any risk for you paying a reasonable down on a project, there is actually considerable risk if your hiring desperate persons who will do whatever to make what they can, I remind you we are in a labor shortage nationally, generally speaking, good trades professionals don't "need" any work from any 1 person. 

Be honest about it with the contractors, tell them you value them but are not super experienced and have fears of getting ripped off in general. A decent GC will understand and show you the protections and work to build a relationship. But if you come off shifty, your going to look like the snake in the grass and a good contractor is going to avoid you like the plague.