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Many Building Contractors insist on payment of a deposit as evidence of commitment on the part of the owner to proceeding with a building project and as evidence of the Home Owner’s financial ability to pay for the contracted work.
The first ground is understandable and justified; the latter is somewhat misconceived and misplaced - but the good news is that BUILDSAFE® can provide the security around payment for the work that Contractors so desperately seek.
We acknowledge that it is entirely understandable that a Contractor would want to see some form of commitment to a project by an Owner, particularly when that Contractor needs to plan work in advance and either accept or turn away other good work opportunities dependant on its available resources. If a promised project does not proceed at the last minute, a Contractor would be left without work and would inevitably incur costs and losses as a result. The most effective sign of commitment to a building project by an Owner is of course the payment of money – a Contract deposit.
On the other hand, and strangely enough, the payment of a deposit does little to secure financial performance of an Owner because it is seldom the first payment claim that presents any difficulty for a Contractor. It is usually subsequent claims and almost always the final claim. In typical contracting arrangements the deposit will have been factored into progress payments and by the end of the job the deposit provides no financial security to the contractor whatsoever – yet this is the time when the contractor is most at risk – this is why BULDSAFE®
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