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  • Payment for work on Roof replacement

    I obtained 2 quote estimates to have the roof on my house replaced. Both quotes want 40 - 50% deposits before work starts, which I understand is quite normal for roofers to do. However, on the one quote the roofer is asking for the deposit "now" with the intention of starting the work 4 months from now. Seems like a red flag to me, however the roofer offered to use the deposit to purchase the metal roof material and have it delivered to our property in wait of the installation. At my location, getting contractor work done can involve waiting months. I am told deposits are a way to ensure the homeowner is serious to get the work done.

    Should I be concerned or is this "normal" roofer practice?
    Measure twice, cut once ... and if that doesn't work try again
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  • #2

    Re: Payment for work on Roof replacement

    I would be asking for past. References and I would contact these people to verify quality of work and how payment was made. Getting a 50% deposit is not out of the ordinary but 4 months before does seem a bit excessive but hard for anyone to give an opinion that is not familiar with practices in your area. If contractors are that busy I don't see his concern if someone changes their mind if the material is purchased. I get a 50% deposit but don't get it until I start the kitchen build. It might be 6 months after the agreement was signed.

    Brian
    Kunzwerks and Wally in Calgary like this.
    If your dreams don't scare you, you are not dreaming big enough

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    • #3

      Re: Payment for work on Roof replacement

      Brian has good advice. The only thing I would add would be if he is well known I doubt he will be unreliable. Obviously the deposit helps him to confirm and lock up the job. However I do see a possible case where he might put you on the list with a tentative date and not a firm date. Once you give some contractors a deposit your start date can be altered at his whim. Salt Spring Island involves off shore shipping etc. and having worked in B.C. I can understand why he wants a solid commitment before he orders.
      "Do it Right!"

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      • #4

        Re: Payment for work on Roof replacement

        Any decent contractor has terms with their suppliers so the argument that they have to get the money up front to secure materials is BS.

        He's looking for 2 things with his request for a deposit. First he wants security that you will stand by your agreement and not shop his price behind his back in the interim and second, like everyone in business he wants to front end load the payment schedule. I try and do the same thing in commercial construction by overstating the value of work completed when I make a monthly draw application ..... that's the way the game is played ..... everyone wants to get paid up front. The trick is not to get greedy and have the owner or architect revise your payment downward. IMHO buddy overplayed his hand and now here looking for a remedy.

        Offer him 5-10% up front on the condition he sets a firm date to start the project then maybe pay him another draw when the materials show up if he squacks. That's reasonable. Tell him he doesn't get the deposit cheque until he provides proof of insurance and workers comp clearance certificate .... it's for your own protection and he's legally required to have a paid up comp account and you are entitled to documented proof .... that's why we have clearance certificates.

        Hold back 10% for the 45 day lien period. It's the law and if the money is in his hands and someone in the supply chain doesn't get paid you are on the hook for that 10% holdback even if you paid it out to the roofer.
        Last edited by dave_k; 01-04-2019, 12:11 PM.

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        • #5

          Re: Payment for work on Roof replacement

          I would purchase the material direct with the manufacture . You might have to go through the contractor to do so. You might also need to pay him upfront for a material list if you are not capable to do such yourself. Then if he do not show on the 4 month date you at least have the materials.
          A lot of things can go wrong to him and or his company over 4 months.

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          • #6

            Re: Payment for work on Roof replacement

            We had a new metal roof installed by Ironwood Shake & Tile out of Courtenay in early summer of 2013. 25% down but he knocked a decent amount off his quoted price because we could wait for the roof and let him install at his convenience. About 6 weeks after the deposit was paid they showed up for installation on Thetis.

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            • #7

              Re: Payment for work on Roof replacement

              I most definitely agree that the contractor is after security for sure. As stated he will put the material on site. That's security for the owner and should be sufficient. The Island off the west coast are a different world for many reasons that involve shipping and I think you will have to cut a reputable contractor some slack in this event. Shipping and material will represent a huge piece of the 50% anyway so it's not like he's trying to scam you and in my experience working on the Islands, if you screwed one client you wouldn't get an opportunity to screw the second one.

              If you want to offer draw payments that's OK but for a roof you might question that? Typical draws on residential construction deal with stages of the work. You get a draw at start following your original deposit then a draw at Foundation completion, then Framing completion, Roof on, Lock up, Mechanical completion etc. etc. It's all written subject to approved inspections by the lender if there is a mortgage to build in place, Otherwise it could be the approval of any designated inspector.. How you would structure draws on a roof is a bit much don't you think? Realistically all draws could be forthcoming on the same day.

              Start of the job could be considered to be the material delivery could it not?

              Dave I'm not disputing your commercial job draws but it sounds like this is just a metal roof on a person's house. A big crew is in and out and gone in a day or two.

              BTW residential draw structures are preset as a percentage of entire cost. For example you may get 15% for the roof on stage. Percentages are set by the bank or lender.
              "Do it Right!"

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              • #8

                Re: Payment for work on Roof replacement

                Originally posted by Rusty View Post
                Start of the job could be considered to be the material delivery could it not?
                Under the law the start of the job is the moment the contract is signed and money changes hands (consideration). Once the material is on site you can bill for it but from a contractural perspective it's meaningless. A contract is whatever the parties agree to. The only thing unique to construction contracts in Canada is the Construction Lien Act is applicable to construction projects regardless of whether the job is residential or commercial.

                Originally posted by Rusty View Post
                Dave I'm not disputing your commercial job draws but it sounds like this is just a metal roof on a person's house. A big crew is in and out and gone in a day or two.
                That doesn't change the nature of the contract. Someone might ask you for money up front or even demand it .... someone might refuse to work without being paid up front .... there are a lot of people I wouldn't work for unless they paid up front. Nowhere in Canadian law does it say you have to pay up front for anything. It's a contract, you negotiate terms. There is no reason whatsoever that your money should earn interest in someone else's bank account for work that hasn't been done and done right.

                Originally posted by Rusty View Post
                BTW residential draw structures are preset as a percentage of entire cost. For example you may get 15% for the roof on stage. Percentages are set by the bank or lender.
                You're confusing construction loan agreements with construction contracts. What you're talking about is an agreement between a lender and a builder to finance a home building project. We are talking about and agreement between a contractor and an owner to perform work. Very different animals.

                Standard construction mortgages set out milestone like that for their draws. The builder then uses those draws to pay out their sub contracts. This is strictly an agreement between the builder and the bank. It has nothing to do with agreements between the builder and the owner or the builder and his subs. The only place where these agreements intersect is The Construction Lien Act.
                Wally in Calgary likes this.

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                • #9

                  Re: Payment for work on Roof replacement

                  Sounds complicated. I’m glad my roofer is an old high school friend whose work is impeccable.

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                  • #10

                    Re: Payment for work on Roof replacement

                    It's pretty straightforward really. There is a reason we call the construction business "contracting", contract law is how the business end of construction works. There are a few things contractually that are unique to construction but the construction business is as straightforward as you can get. My daughter was until recently an estimator / engineer in the aerospace business ..... now their agreements are complicated.

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                    • #11

                      Re: Payment for work on Roof replacement

                      Originally posted by ub1chris View Post
                      Sounds complicated. I’m glad my roofer is an old high school friend whose work is impeccable.
                      Yes it does sound complicated Chris and it isn't.

                      The Op Kunzwerks needs a roof on his house. He lives on a island off the west coast. We have no idea how big the job is. It might take a day or a week who knows? The job on an island requires shipping on a ferry etc. That is the major difference.

                      Dave I will start a new thread regarding building contracts and draws etc. I have written a bunch of them as I assume you have too or maybe your negotiator/lawyer did. It won't mess up this thread for the OP. Hopefully that's OK and we can all learn something else.

                      "Do it Right!"

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                      • #12

                        Re: Payment for work on Roof replacement

                        Kunstwerks If your roofer stands up to the scrutiny I would have no issue suggesting you give him his deposit as requested or at the very minimum the material cost including his markup which he may or may not wish to divulge but if he orders and pays for and has the material delivered he should have earned at least some of his overall price.
                        "Do it Right!"

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                        • #13

                          Re: Payment for work on Roof replacement

                          Fwiw, I always get a minimum 40% deposit on most jobs within a couple weeks of starting any major or minor renovation (with 10% holdbacks and further progress payments). I'm not here to finance a clients project. The cash flow itself is not important to me on a day to day basis because, I could float pretty much all my work if needed until completion. The simple truth is why would I put my family in that position of taking a financial risk? It's extremely rare that anyone questions it and if they do I'll simply state that it always ensures that their money is always available to pay for their job. I not waiting on a cabinet draw from another project to pay for the windows of their job. I schedule payments so that I'm always ahead of the costs by a substantial amount.
                          I have had a couple potential clients ask me to float the job until its done and I've just walked from it. No thanks. On the flip side, I've had clients not want to deal with progress payments and holdbacks and such and want to pay up front the job. To them I say the same thing, 40/40/20% payments works and protects both of us. What would happen if I drop dead half way through the project? It may take a while to get the balance of your money back but at least you wouldn't be out a ton of cash waiting for lawyers to argue over dollars and dimes.
                          Yeti, Rusty and like this.
                          Paul

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                          • #14

                            Re: Payment for work on Roof replacement

                            Originally posted by Rusty View Post
                            Kunstwerks If your roofer stands up to the scrutiny I would have no issue suggesting you give him his deposit as requested or at the very minimum the material cost including his markup which he may or may not wish to divulge but if he orders and pays for and has the material delivered he should have earned at least some of his overall price.
                            Thanks Rusty, I have been reading your other thread just for background info. All very interesting and a bit scary.

                            Thanks to everyone on their input. I have checked out 3 referencesfor this roofer, all being fantastic (as if there would be a negative review, ha ha). I have contacted the roofer to say it's a "go" , with the condition I see some insurance or WCB coverage. Two days have gone by (crickets ... ..) No word, yet.
                            Measure twice, cut once ... and if that doesn't work try again

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                            • #15

                              Re: Payment for work on Roof replacement

                              I wouldn't be scared at all. You're only doing the roof. If you were doing a great big renovation it might be a different concern because of te time and money involved but my roofer buddy is usually done in a day. He has a ten man crew though. He has done my roof 3 times because of hail damage and he was i day and gone including a full strip and my roof is not small or simple..btw insurance is getting ridiculously expensive and WCB is not what it used to be. I'm not saying you don't need either but too many horror stories from injured workers getting screwed around.

                              I've walked from more than one job because guys asked for all sorts of inane stuff even after supplying insurance and WCB numbers. BBB member, NO! Banking info, lawyers name, business licence? Are you kidding? My reputation may be like your roofer guy. Maybe he's a handshake guy.like me.
                              "Do it Right!"

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