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#157221 - 09/15/05 07:22 PM deposit amounts
Joey D Offline

Registered: 10/10/03
Posts: 263
Loc: Arlington MA U.S.
Are there laws to limit the amount of a deposit you can receive from a customer?
On a contract job what percentage is a fair amount for a deposit?
I do 50% to start and 25% at rough and the 25% left at final. I have thought this to be fair and it gives me something if a customer decides not to pay.

Business, Office, Estimating, Legal:
#157222 - 09/15/05 08:02 PM Re: deposit amounts
Tiger Offline

Registered: 05/04/05
Posts: 714
Loc: Crystal Lake, IL USA
In electrical work there is usually a lot more work to rough than final. I usually estimate the final and make that the final payment. Depending on the size of the job I may have an advance and rough payment also. On the smaller jobs with an established client I might only have payment on completion.

Basically, the longer the business relationship, the less I ask for in advance. There are no rules that I'm aware of. The contract is an agreement which includes the method of payment.


#157223 - 09/16/05 02:53 AM Re: deposit amounts
Pat@Amber Offline

Registered: 08/23/04
Posts: 107
Loc: Gaithersburg, MD USA
I'm pretty sure there are laws limiting the amount of the initial deposit. They most likely vary from state to state. I've never looked for the actual law here in Maryland so this is just hear-say.

I try to do 1/3, 1/3,1/3 to keep the cash flow going. No reason to play banker for everyone else.

Power to the people

#157224 - 09/16/05 03:00 AM Re: deposit amounts
Pat@Amber Offline

Registered: 08/23/04
Posts: 107
Loc: Gaithersburg, MD USA
Just found in California the limit is $1,000 or 10% of total, whichever is less! In my county in Maryland, the limit is 33%. I had to Google - (down payment contract contractor Maryland) to find it.

[This message has been edited by Pat@Amber (edited 09-16-2005).]
Power to the people

#157225 - 09/16/05 12:03 PM Re: deposit amounts
LK Offline


Registered: 01/21/03
Posts: 1721
Loc: New Jersey
What is more important then a deposit with the contract, would be your progress schedule of payments, another point to remember is what will the amount of purchased material be, consider a job that has special ordered items, these items may require advance payment, in this situation, the contract wording, may allow a larger down payment.

Contract law, is a field of it's own, and every state has different views on contracts, best to get good legal advice up front, it may help prevent problems, that can lead to considerable losses.

#157226 - 09/23/05 03:01 PM Re: deposit amounts
Tesla Offline

Registered: 06/16/04
Posts: 1280
Loc: Sacramento, CA
California has low limits Home Improvement Contracts (those with the home owning public):

10% or $1,000 whichever is less for electrical.


#157227 - 12/04/05 06:06 AM Re: deposit amounts
jr4wire Offline

Registered: 11/29/05
Posts: 12
Loc: MA, Usa
I do:
40% the day I start rough.
30% after completion of rough, not upon rough inspection.
20% the day I start finish.
10% after completion of finish, again not upon final inspection.

Any add ons or extras have to be paid in full before I do anything.

I always get a payment before inspection or I don't call for one, this is the one of the ways to ensure I will get paid. And if all else fails the only thing I lose out on is my profit( 10% ).



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