Home reno co. bankruptcy ripoffs Calgarians including Brendan Morrison

[VladtheImpaler]

I would never give anyone a deposit. It just invites thievery. We just did a major reno (hundreds of 1,000s) and did not pay a cent up front. We paid as work was completed. Used the same contractor as Locke references a year ago.

[speede5]

Originally Posted by Locke

50% deposit up front? Go pound sand right there.

I won't start a job without that much, it covers the materials should the customer flake out. On a big job a will do milestones, but i never start without cash in hand. I would hazard a guess there are more contractors looking for money than customers. And once the job is done it can be a pain to get paid.

[Locke]

Originally Posted by speede5

I won't start a job without that much, it covers the materials should the customer flake out. On a big job a will do milestones, but i never start without cash in hand. I would hazard a guess there are more contractors looking for money than customers. And once the job is done it can be a pain to get paid.

Okay but then we have to talk about a matter of size as well as legitimacy.

I did a significant renovation to my home after I purchased it and the renovator asked for 0 up front and a signed contract of engagement, which was reasonable. Basically that contract means that I'm liable for all supplies and labour costs incurred up to the point where I 'flake out.' Its legally enforceable by both small-claims court (slam dunk) or Builder's Lien. Beyond which we would pay as we went.

I'm not covering all the costs of all the materials up front, thats straight-up insane, forget the client (me) flaking out, my contractor can take that deposit and....holy crap, disappear or even worse, go bankrupt. Thats never been known to happen before other than in the OP right?

If the contractor cant handle those costs up front then that is a serious allegation against their legitimacy.

Most contractors have suppliers with 30-90 and sometimes even 180 day repayment terms, plenty of time to buy the supplies, do the work and collect payment. And if they dont have those terms, depending on the size, cost and complexity of the renovation then that would raise some serious red flags.

As I stated, if a contractor demands 50% up-front they can pound sand. They likely were planning on it anyways.

[OMG!WTF!]

Originally Posted by speede5

I won't start a job without that much, it covers the materials should the customer flake out. On a big job a will do milestones, but i never start without cash in hand. I would hazard a guess there are more contractors looking for money than customers. And once the job is done it can be a pain to get paid.

I can see that if you have a pre paid contractors license, a current bond, insurance, license, new home warranty, references, credit references from suppliers...... all the stuff this absolute jackass never had. Short of that, pound sand. Contractors have a big advantage when in comes to collecting money....a property. Chasing contractors around and hoping for a paid off truck to seize is literally pointless.

[VladtheImpaler]

Originally Posted by speede5

I won't start a job without that much, it covers the materials should the customer flake out. On a big job a will do milestones, but i never start without cash in hand. I would hazard a guess there are more contractors looking for money than customers. And once the job is done it can be a pain to get paid.

Ridiculous. You, as the contractor have recourse (see Locke's post). The homeowner doesn't if you just disappear. You can always find a contractor who won't ask for a huge deposit if you do some research. We interviewed 8 different people and nobody wanted a deposit.

[speede5]

Sorry I should clarify, I do this on the side. The biggest projects I've done are full basements and a couple of basement suites, I am not in a position to front those projects, but that says nothing about my legitimacy. Depending on the size of job I'm sure you can find someone to start with no deposit.

I've seen guys get shafted by non paying customers, and while there are recourses it's a pain in the ass and it doesn't get your bills paid while you wait to collect.

Anyway, everyone does their thing and this has worked for me, and other contractors I know.

[OMG!WTF!]

Originally Posted by speede5

Sorry I should clarify, I do this on the side. The biggest projects I've done are full basements and a couple of basement suites, I am not in a position to front those projects, but that says nothing about my legitimacy. Depending on the size of job I'm sure you can find someone to start with no deposit.

I've seen guys get shafted by non paying customers, and while there are recourses it's a pain in the ass and it doesn't get your bills paid while you wait to collect.

Anyway, everyone does their thing and this has worked for me, and other contractors I know.

If you're taking deposit money without a prepaid contractor's license you're actually breaking the law. It's fraud. Not to mention the other issues regarding safety on the job site and insurance. You don't have to front all the money for these projects but not setting your business up properly says everything about your legitimacy. You are in every way illegitimate without properly certifying your legitimacy.

[flaming_potato]

I am in the flooring business and the only time we take a deposit is when we supply the flooring material that the customer has picked out. In these cases a signed contract is involved to protect both parties interests. We work hard to ensure the product that our customers order is what they wanted and the specs are accurate and work closely with our suppliers so we can ensure quality control and educate our customers on how to care for their floors.

While in most cases we have the ability to front the entire job the reality is that it protects us when the customer (builders, designers included) decide to change their minds on the flooring product after it has been ordered and shipped which happens more often than you might think. It's time consuming and expensive to receive and return 1200sqft of hardwood and order something else in that event.

However, customers must also do their research when hiring trades. If you are just hiring someone to install your cabinets, baseboards, flooring, painting etc. where they are not supplying thousands of dollars worth of material and only supplying labor then you should NEVER give a deposit. Payment installations if the job it is a big job (1-2 or more months)? Sure, but nobody (business or sub-trade) should ever be paid in full until the job is done and the customer satisfied.

Having said all that, there are a lot of shady people out there especially in this economy looking to promise you everything you want to hear and for the price you want but they screw you by either not finishing the job and taking your money or they just lack the expertise and bail when they get in over their heads. When hiring sub-trades always ask to see their WCB # and business number and make sure they have insurance. When I do side jobs that information is provided in my estimates. If they get hurt in your house you can be held liable (WCB), or any damage to your house (ie.punctured water line while nailing in hardwood) can be covered by their insurance and make sure they have a valid business number and actually do their trade for a living and aren't some weekend warrior handy man type.

At the end of the day the people you let work in your house are as important as the renovation itself. I hate to see people getting screwed over in these situations. But just because a company or sub trade asks for a deposit it does not mean they are going to screw you or cant handle the financial burden. Put yourself in our shoes, if we have just even 10 customers in one month order 1000sqft wood through us @ and average of $7sqft without a deposit we now have to front $70,000 worth of materials while still paying our trades to complete the work. If you don't have access to money to put down on materials for your renovation then you shouldn't even consider doing one.

[speede5]

Originally Posted by OMG!WTF!

If you're taking deposit money without a prepaid contractor's license you're actually breaking the law. It's fraud. Not to mention the other issues regarding safety on the job site and insurance. You don't have to front all the money for these projects but not setting your business up properly says everything about your legitimacy. You are in every way illegitimate without properly certifying your legitimacy.

What is a prepaid contractors license?

And who said I don't sign contracts or have a license and insurance?

[taco.vidal]

Originally Posted by speede5

I won't start a job without that much, it covers the materials should the customer flake out. On a big job a will do milestones, but i never start without cash in hand. I would hazard a guess there are more contractors looking for money than customers. And once the job is done it can be a pain to get paid.

Originally Posted by speede5

Sorry I should clarify, I do this on the side. The biggest projects I've done are full basements and a couple of basement suites, I am not in a position to front those projects, but that says nothing about my legitimacy. Depending on the size of job I'm sure you can find someone to start with no deposit.

I've seen guys get shafted by non paying customers, and while there are recourses it's a pain in the ass and it doesn't get your bills paid while you wait to collect.

Anyway, everyone does their thing and this has worked for me, and other contractors I know.

Originally Posted by speede5

What is a prepaid contractors license?

And who said I don't sign contracts or have a license and insurance?

Wow. You might have good intentions, but your the kind of contractor people need to avoid. You take 50% deposit upfront and while you may have good intentions, if something goes wrong like you get hurt or your wife leaves you and takes your money, the client gets screwed.

http://www.servicealberta.gov.ab.ca/1254.cfm

Are you licensed? Bonded and insured? How about WCB?

[Locke]

Yeah, if I dont pay the contractor I'm pretty screwed. I wind up with:

- A half-finished reno
- Paying someone else to finish it or restart it entirely
- An angry contractor looking to break my knees
- A lawsuit or lien

Its entirely within the client's best interest to pay presuming the agreed upon work was done, done well, and done in a timely manner.

But putting up a big deposit? I have no realistic way of being assured of getting that back if something goes sideways.

I mean, with my reno if I'd paid up 50% and my contractor bailed even if he was bonded and I sued him and won I'd have taken a staggering loss.

[flaming_potato]

Originally Posted by Locke

Yeah, if I dont pay the contractor I'm pretty screwed. I wind up with:

- A half-finished reno
- Paying someone else to finish it or restart it entirely
- An angry contractor looking to break my knees
- A lawsuit or lien

Its entirely within the client's best interest to pay presuming the agreed upon work was done, done well, and done in a timely manner.

But putting up a big deposit? I have no realistic way of being assured of getting that back if something goes sideways.

I mean, with my reno if I'd paid up 50% and my contractor bailed even if he was bonded and I sued him and won I'd have taken a staggering loss.

Which is why it is important to do research and interviews when dealing with a general contractor or a sub trade. If you were doing big scale renovation you would be an idiot to not work out the terms (timeline, payments, etc) before hand with a written signed contract with either each trade (if you are hiring the sub trades) or with the General Contractor.

In our trades case asking for a deposit on flooring material that a customer picks out is common and not unreasonable at all. Some general contractors or trades don't ask for deposits and that's fine if you can get one to front your entire renovation but the notion that it's unacceptable to ask for one under certain circumstances is absured.

I see what your saying though, no reputable company or client wants to deal with a court situation that's why it's important to have a detailed contract signed that gives both parties piece of mind. It's getting to the point now where our requirements for a houses humidity and job site conditions are so strict in order to comply with the manufacturers warranty that we have actually lost jobs because people think it's ridiculous to have the realitive humidity in your house above 30% in order to minimize gapping in the hardwood that they try to go with a trade that doesn't have those requirements and end up getting a failed hardwood floor after spending thousands in it.

[undercoverbrother]

Things that make you go hmmmmm:

http://forum.calgarypuck.com/showthread.php?t=150990

[flaming_potato]

Also let me clarify something, if we order wood for a general contractor or builder that we have built a relationship with we do not ask for a deposit and operate with them in good faith. But if a client walks in who we have never worked with and wants 2000sqft of hardwood supplied and installed then we will ask for a deposit.

[speede5]

Originally Posted by Locke

Yeah, if I dont pay the contractor I'm pretty screwed. I wind up with:

- A half-finished reno
- Paying someone else to finish it or restart it entirely
- An angry contractor looking to break my knees
- A lawsuit or lien

Its entirely within the client's best interest to pay presuming the agreed upon work was done, done well, and done in a timely manner.

But putting up a big deposit? I have no realistic way of being assured of getting that back if something goes sideways.

I mean, with my reno if I'd paid up 50% and my contractor bailed even if he was bonded and I sued him and won I'd have taken a staggering loss.

I totally understand your point, and I'm definately not thinking a guy should put up 100 large as a deposit on a huge job. There's lots of ways to make that scale of job work for both parties while protecting them as well.

My only input to this discussion was supposed to be that deposits aren't a foreign concept and there are lots of contractors who want them.

And now apparently I'm some shady ####### who should be avoided. smh

[flaming_potato]

Originally Posted by speede5

I totally understand your point, and I'm definately not thinking a guy should put up 100 large as a deposit on a huge job. There's lots of ways to make that scale of job work for both parties while protecting them as well.

My only input to this discussion was supposed to be that deposits aren't a foreign concept and there are lots of contractors who want them.

And now apparently I'm some shady ####### who should be avoided. smh

Yeah situations like the in the OP make it harder for the smaller guy with good intentions who is trying to make a living in the construction buisness. You're not a shady guy if you follow the rules and have the appropriate licensing, insurance and act in the best interests of your clients while being able to cover your bills and make some money at the end of it.

[cam_wmh]

Originally Posted by speede5

I totally understand your point, and I'm definately not thinking a guy should put up 100 large as a deposit on a huge job. There's lots of ways to make that scale of job work for both parties while protecting them as well.

My only input to this discussion was supposed to be that deposits aren't a foreign concept and there are lots of contractors who want them.

And now apparently I'm some shady ####### who should be avoided. smh

You kind of set yourself up for that, when you strongly suggested the 50% deposit is requisite to starting your work.

You also mentioned you do these jobs, "on the side", which screams not having all the necessary licensing, insurance etc;

Am I mistaken?

[speede5]

"on the side" as in it's not my full time job, and yes I have insurance and license.

We can't all be Mike Holmes, but that doesn't mean we're all ripping people off.

[Locke]

Originally Posted by undercoverbrother

Things that make you go hmmmmm:

http://forum.calgarypuck.com/showthread.php?t=150990

Dude, dont do that.

I know its combining two unrelated threads on CP and its funny, I've done it, I get it, put its also part of this guy's livelihood which is tough enough to come by around here already, he doesnt need some sort of pseudo-stigma attached to him even if he is a Rider's fan.

He seems like hes an upright contractor, they might be rare as Unicorns but I understand they do exist.

Originally Posted by speede5

I totally understand your point, and I'm definately not thinking a guy should put up 100 large as a deposit on a huge job. There's lots of ways to make that scale of job work for both parties while protecting them as well.

My only input to this discussion was supposed to be that deposits aren't a foreign concept and there are lots of contractors who want them.

And now apparently I'm some shady ####### who should be avoided. smh

And fair enough. I'm sorry you got dragged into the 'shady contractor' thing. That shouldnt have happened. Its part of the nature of the industry but it shouldnt have happened here without any warranted reason.

I apologize for that, I never meant to attack your character in that way. Contractors have it hard enough without baseless attacks.

I agree with you that deposits arent unheard of but they have to be appropriate within context.

Originally Posted by taco.vidal

Wow. You might have good intentions, but your the kind of contractor people need to avoid. You take 50% deposit upfront and while you may have good intentions, if something goes wrong like you get hurt or your wife leaves you and takes your money, the client gets screwed?

I also have to agree with this.

It isnt about honesty or good intentions its about life, which is typically what happens while you're busy making plans.

I'll share a generic anecdote that happened to a client of mine:

He is a contractor, he was going from one client to the next, he takes a deposit from the current client after completing his previous job. All good.

But then the previous client goes a little crazy. Heres where it gets grey; we all know people like this, they get a little particular about their house, they think they paid Michaelangelo to paint their basement or that they should have the finest walnut baseboards or that artisans from Italy should have tiled the floor of their crapper or whatever, it isnt a billion-percent perfect and YOU HAVE TO FIX IT AND FIX IT NOW!!!!!

So the previous client keeps calling him back for minor touchups, nothing big but consistent, its all small so he doesnt keep billing he just fixes little things. And here is where it escalates.

Hes too nice to say 'no we're done' and knows that if he tries: 'its going to cost you more for me to fix' that the client is going to flip.

So he doesnt. So what happens?

He starts burning through the current client's deposit to pay trades and materials to fix the previous client's neurotic issues.

Now what? Its going to have an inevitable domino effect like a Ponzi scheme except without the malice.

Its not malicious intent or dishonesty, its the opposite. But it happens. You know what they say about the road to hell.

So in essence, yes, deposits are a thing and they happen and they're okay, within reason but I'd wager that the bigger the job the less frequently are deposits asked for. Look at the case in the OP, they nabbed 50% deposits and vanished like a fart in the wind.

[flaming_potato]

Originally Posted by Locke

But then the previous client goes a little crazy. Heres where it gets grey; we all know people like this, they get a little particular about their house, they think they paid Michaelangelo to paint their basement or that they should have the finest walnut baseboards or that artisans from Italy should have tiled the floor of their crapper or whatever, it isnt a billion-percent perfect and YOU HAVE TO FIX IT AND FIX IT NOW!!!!!

So the previous client keeps calling him back for minor touchups, nothing big but consistent, its all small so he doesnt keep billing he just fixes little things. And here is where it escalates.

Hes too nice to say 'no we're done' and knows that if he tries: 'its going to cost you more for me to fix' that the client is going to flip.

So he doesnt. So what happens?

He starts burning through the current client's deposit to pay trades and materials to fix the previous client's neurotic issues.

Now what? Its going to have an inevitable domino effect like a Ponzi scheme except without the malice.

Its not malicious intent or dishonesty, its the opposite. But it happens. You know what they say about the road to hell.

So in essence, yes, deposits are a thing and they happen and they're okay, within reason but I'd wager that the bigger the job the less frequently are deposits asked for. Look at the case in the OP, they nabbed 50% deposits and vanished like a fart in the wind.

I have had clients like what you stated. Unfortunately it's part of the buisness and in those cases where touch up's or repairs are needed after the job has been completed we provide a service contract in which everything that needs to be done in order for the client to release the final payment is listed and signed once completed and inspected. Now this doesn't always go ad planned and some clients can have unrealistic expectations and are never happy (I blame Mike Holmes and HGTV) and we bend over backwards to get paid. And funny that even people with TV shows end up screwing people over. Makes our jobs harder.