So your builder wants €20k upfront? Here’s when you should worry

the big reno clinic

Our resident quantity surveyor Shay Lally looks at when it’s a good idea and not so good one to pay your builder some money up front.

IN OUR BRAND-NEW series, The Big Reno Clinic, experienced quantity surveyor Shay Lally provides answers and solutions to the big (and little, but important) questions you may have about making the most of your home. 

This week’s question

Our builder wants €20,000 up front, before he’s even come to site. That can’t be right, can it?

Shay says

Short answer: it can be. A deposit is common on renovations, but how it’s structured matters far more than the fact that it exists.

In my own company, we charge a deposit on any project over a certain value. It’s typically 10% of the overall project value, plus 50% of the cost of windows, plus whatever deposit is required for other items we need to order on the clients’ behalf, like a kitchen or bespoke joinery.

The exact figure shifts with the value of the works and the cost of what needs to be committed to.

Why we do it

• Supplier terms. Window suppliers typically ask for 50% before they’ll process an order, and windows and kitchens usually have lead times of eight weeks or more. If they’re not ordered early, there’ll be a delay on site

• Protection for the contractor. If a builder orders windows with their own money and the client changes their mind, the builder is left with an order nobody wants

• Commitment on both sides. A deposit makes clients more decisive about windows, kitchens and a start date.

Once a client’s payment lands, we pay the suppliers and confirm in writing that those items are paid for. And the terms are clear from the outset: our costings include a detailed breakdown and the payment terms, including the deposit, before anyone decides to proceed.

The trap: A deposit with no explanation, no paper trail, or no link to real costs. I’ve seen subcontractors and suppliers quote with no mention of a deposit, then ask for one at the eleventh hour, having never asked before. To me, that’s a red flag for a cash flow issue. I’ve also heard from homeowners who paid a deposit and then struggled to get a contractor to start, or found their windows hadn’t been ordered.

Where I draw the line: 50% up front on a labour-only contract. When the contractor isn’t buying materials, fixtures or fittings, there’s nothing to put in production, so there’s no reason to take half the money before starting. Some will say, “But I’m paying the window company 50%.”

The difference is that the window company is putting a bespoke item into production. A tradesperson asking for half up front for labour isn’t in the same position. Staged payments, tied to milestones or a valuation of completed works, are fair. A 50% payment before a tradesperson starts is a gamble I wouldn’t recommend anybody takes

Your roadmap before paying a deposit

• Ask for the breakdown. What’s the deposit made up of? Is it a percentage of the contract, an order for specific items, or both?

• Check the terms in writing. Payment terms should be in the quotation from the start, not introduced halfway through

• Tie the money to real purchases. If it’s for windows or a kitchen, ask for confirmation that the order is placed and paid

• Do your homework. Research the contractor, and ask for references and recent clients you can speak to. Don’t go with the first contractor who comes along

• Insist on staged payments after that, linked to milestones or valuations of completed work

Key takeaways

• A deposit isn’t a red flag in itself; an unexplained one is

• A typical structure is around 10% of the contract value, plus 50% of bespoke ordered items like windows or cabinetry

• A deposit should be tied to something real: an order being placed or a start date being secured

• A late request for a deposit from someone who never asked before can signal cash flow issues 

• 50% up front for labour only is a gamble. Pay on milestones or valuations instead.