Home improvement contracts When to pay

To avoid disputes, it is essential to break down the payments into stages

Paying for building work is often a fraught topic for both parties. Sometimes the contractor does the work to the standard required but the client doesn’t fulfil their side of the bargain. At other times the contractor doesn’t do the work as promised, leaving the client angry, especially if they have handed money over in advance.

To avoid disputes, it is essential to break down the payments into stages – and to pay only after the work has been done to your satisfaction. 

Go through the different costs of the project at each stage. For example, discuss what the cost of materials is week by week and when they have to be paid for. Most companies, such as kitchen suppliers or builders’ merchants, ask for payment within 30 days of delivery.

Credit cards

It’s also a smart move to ask if the payment can be made by credit card. This can mean you have to pay only once the goods have actually been delivered and can give you extra legal rights as a consumer. You may be able to claim against the card issuer in some circumstances – if goods or services are faulty or not as described, for instance.

Paying for labour

Once you have worked out and agreed a schedule of payment for the materials, look at the labour costs. If the contractor pays these weekly, it’s a good idea to match this with the work they have to do and stage the payments accordingly.

For example, if week one is for clearing and preparing the site, payment will be made at the end of that week, provided that the work is finished properly. If week two is for building the foundations and walls or creating the frame for the conservatory, payment for these tasks should be made at the end of that week.

Take time to sit down with the contractor and discuss these payments. Your ideal solution is to pay only when the job is done – and to withhold 5% to 10% of the total bill for a month or so afterwards to make sure there are no problems. However, this is not always practical. You need to come to an agreement that suits both parties.

Once you have agreed payment terms, make sure that this schedule is referred to in the contract and attached to it.

Withholding payment

The only circumstances in which you can reasonably withhold payment are when the contractor is genuinely at fault and you can prove this by referring to the contract agreement. Never hold back money from a contractor unfairly. For example, if 90% of the work is finished to your satisfaction, you should pay 90% of the bill, not 50% – unless getting things put right will cost you that proportion of the overall total.