Be Cautious of “Upfront Payment” Requests!
Beware of any contractor that asks you for payment before he starts the job. A contractor asking for upfront payment could be financially unstable. He may be unable to buy the proper supplies or pay his employees. You may not have heard of “mechanic’s liens” but they can result in a huge nightmare for homeowners. A mechanic’s lien is a legal claim that can be filed against your home by anyone who supplies labor or materials to fix, repair or improve your home. The word “anyone” includes not only the contractor you hire but may also include any subcontractors or material suppliers that your contractor hires (who may be totally unknown to you). When you hire a contractor to work on your home, the last thing you expect is the “surprise” of a mechanic’s lien being filed in the public records against your own home. But that can easily happen if the contractor you hire fails to pay its subcontractors or material suppliers even after you pay your contractor. Worst of all, you may never know if your contractor has paid its subcontractors or material suppliers until the day you get served with a lawsuit announcing that your own home has been slapped with a mechanic’s lien by “unpaid” subcontractors or material suppliers.
A contractor that is financially unstable is more likely to cut corners and to use sub-standard materials resulting in a repair or installation that doesn’t last as long as it should or meet minimum safety standards.
A contractor asking for upfront payment may know that he will not be able to finish the job on time or to your satisfaction. He may be trying to get as much of your money as he can before you get frustrated with him. I have seen this happen many times over the years, usually this is how it goes; the homeowner makes a sizable upfront payment, the contractor begins to do some work but after a short period of time he leaves. After several phone calls to locate him and a few days he comes back and does a little more but leaves again. This cycle repeats and gets worse until the frustrated homeowner finally has enough. They must now start over with another contractor. Many times it is more difficult and time consuming for the next contractor to finish the job than it would have been to do the job from the start. The homeowner ends up paying more money and wasting a lot more time than they could have.
Finally there are some “contractors” who are really just scam artists. They have no intention of ever doing any work; they just want to grab your cash and go. These guys are predators that usually target the elderly or other unsuspecting, trusting individuals. They give our entire industry a bad reputation and have no place in it.
In some cases it may be appropriate to pay a deposit for a special order item or a part that can’t be returned, however this should be a small percentage of the total cost. If your contractor asks for a large upfront payment, don’t use him!