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nknowland · 13-01-2024, 09:54

We had a lightening strike on our boat last June. We got a repair estimate for $15k. We are in the process of scheduling the repair, and the company is asking for full payment (parts&labor) before they start the job.

Is this standard practice?? We’ve never had to prepay before, but we’ve also never had such a big job.

Our big fear is getting scammed.

Your thought please…

TIA

**Pete7** · 13-01-2024, 10:00

Wouldn't be my first choice. Once they have your money there is no incentive to finish the job in a timely manner. Instead you are likely to see your work stopped whilst they take on other work.

You might compromise and agree to fund major components which then become your property.

Pete

Benz · 13-01-2024, 10:14

A materials deposit of up to 50% of the total repair cost is not unheard-of in the rigging world. That way the yard isn't leveraged buying specialty materials that they'll lose money on if the customer walks away, and there's incentive to finish the job and get the rest of the payment. The customer has skin in the game as well, so he's unlikely to take the job elsewhere after the yard's ordered materials.

landsend · 13-01-2024, 10:42

I definately would not give them 100% up front. Done that before on a $300 electrical job and it took a long time for the electrician to show up. Like Pete7 said, they have no incentive to finish/start.
Benz advice is good too.
When I repowered my boat I bought the engines myself. Good luck.

MicHughV · 13-01-2024, 10:48

My experience is that it's best to get it all done in writing.

I like to agree to a 10-25% down payment for materials, etc, if these are accompanied by a receipt, and then the contractor can make "draw requests" as he proceeds, based on work accomplished to date, verifiable by observation. For each draw request, I will hold back a 10% retainage to paid once the job is finished and the contractor provides proof that any subcontractor hired by the primary contractor has already been paid by him.

This is pretty much the standard operating sequence for most construction jobs and if the contractor hesitates to agree, I'd be shopping for another contractor.

Even a small dollar job benefits from a written contract. I've seen jobs where the contractor has sub-contracted the entire job out to a secondary contractor, skimming his percentage of the top without actually doing any of the work.

Contractors know how to game the system. They usually have buddies in the business that can provide materials, labor, etc, at cost.

Above all else, it's important that you are allowed a "supervisor" role so you can keep tabs on what is being done or not.

One might think this is a complicating thing to do, but it really isn't. It makes the contractor aware he needs to toe the line to get paid.

Jimbo2010 · 13-01-2024, 10:55

If a company doesn't have credit with their suppliers it means they are not financially stable to begin with.

NEVER pay up front, move to another boat yard

boatpoker · 13-01-2024, 11:16

Been in this business a long time. Only people I've seen asking for up front $$$ were crooks.

On bigger jobs I've seen staged payments i.e. X-amount at each stage of repairs. I would not have a problem with that.

Get it all in writing and check out the contractor thoroughly.

Mickeyrouse · 13-01-2024, 11:24

Large construction projects are usually paid by a percentage of completion at agreed upon intervals. Up front? For all you know you’re paying for someone’s plane ticket.

CrispyCringle · 13-01-2024, 12:13

No way Id pay 100% up front. Unless I had a long relationship with the contractor. And I do most of my own work, so hopefully that will never happen. No reason for paying it all except to get scammed. A percentage is okay, or running payment of materials. But there is no incentive if you paid 100%. Only additional cost.

MicHughV · 13-01-2024, 14:23

For sure..in addition to all the above...ask for some references and make sure you call 'em to find out how it was to deal with a particular contractor.

Tallying up the responses above it's clear no-one thinks an upfront 100% payment is the thing to do.

Fore and Aft · 13-01-2024, 14:39

Nknowland 50% deposit sounds fair. You don't mention if you are passing through or if this is your regular marina where you are well known. So what's to stop you from just sailing on when the works done. We also can't see you and your boats appearance. If you're a bit scruffy looking then the contractor is probably wondering if you can pay the bill. When I was boat building I seemed to be forever chasing bad paying customers.
Cheers

Kazamaran · 13-01-2024, 15:17

Generally you can authorize a “pay direct” to the contractor, agree on a schedule and be done with it. As pointed out, you could be at risk of an interrupted schedule. My preferred method is to get the check in my hand, fund the material purchase and hold the balance until the job is complete and verified by dock or sea trial. That gives all parties skin in the game. They’ll generally go for net 15 or 30. If they’re reputable, the get it. Good luck.