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Retainage Question.

Repair company For water damage to my FL home wants 100% upfront for “materials.” I want to use “ retainage” as allowed to insure prompt and satisfactory completion, having read of instances where terrible issues occurred where a company received 100% then never completed the work. Any expert advice you give will be greatly appreciated ! Thank you.

2 replies

Jul 16, 2020

Ultimately, it's up to a property owner and their contractor to negotiate the terms of their agreement. It's common for a contractor to want a large up front payment, but it's also wise for an owner to avoid paying too much before work is actually done. Utilizing progress payments throughout the job is extremely common, and it is typically a fair arrangement for everyone involved. With that being said, paying 100% up front is extremely dangerous. Down payments are generally much, much lower than that - anywhere from 10-30% or so would seem more typical. If your contractor is asking for full payment up front, that might serve as a red flag - and it may be a good idea to do some research on them before signing any contract, estimate, or agreement. Further, asking them to provide a detailed breakdown of materials that will be purchased with the down payment might be wise too. That should provide much more transparency. Plus, if they refuse, that may be another red flag. As for the use of retainage - that's a part of the negotiation process. It's extremely common for an owner to want retainage, but it's also common for a contractor to resist it (often, for good reason). So, it's really up to you and your contractor to figure out a solution there.

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Jul 16, 2020

Excellent response and extremely helpful. THANK YOU !

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