How much advance payment can your contractor ask? Six golden tips
What do you do when your contractor asks for an advance that is too high? And when do we even talk about an amount that is too high? No mean feat for the insecure client. How do you avoid being tongue-tied when the moment comes?
Wet-Breyne offers protection
If you work with a general contractor or turnkey company for a new construction or total renovation, you are safe thanks to de Wet Breyne . This states that the contractor may not demand more than 5% of the total amount as an advance. Moreover, you are protected against irregularities in the contract, and your payment terms are fixed.
Breyne Act not applicable? Avoid large advances
It is different when you start your construction or renovation project with different contractors and the Breyne Act does not apply. In that case, a contractor is free to choose his advance. Golden tip there: avoid large advances.
An advance of 20 to 30% at the start of work is normal. Don't forget that contractors have to purchase a lot of raw materials and materials. In addition, they also advance the VAT. But often no advances are requested, but interim invoices sent with a detailed state of progress when the works have progressed and certainly with reliable contractors!
Record everything well on paper
So everything comes down to making good agreements. Here are some tips that you should not ignore:
Never pay excessive amounts in advance. If you do not agree with a requested advance, try to reach a compromise before you sign the offer.
Double-check all conditions in your contract proposal. How is your price – and therefore also your advance – determined?
For larger projects, for example the shell construction phase, it is best to pay according to the progress of the work. Many contractors do this as standard per completed intermediate phase, after your architect has given the green light each time.
In addition to the exact sum, also agree on the payment times. This is beneficial for both you and the contractor.
Put all agreements made on paper, with signatures of both parties. This way you can always fall back on written documents.
Pay as little cash as possible. And request invoices and payment receipts. Undeclared work is not only illegal. If something goes wrong, you are anything but strong. In addition, you need your invoices to apply for premiums and tax credits.
Are you still looking for the right contractor? Then take a look at buildyourhome.be .