Do your due diligence on suppliers

[donna]

This will happen a lot more this year as low sales bite.

A couple chose the cheapest quote for a new kitchen - they paid a 50% deposit - the business went into liquidation - and the deposit was lost!

What's the lesson we can learn from this event?

Do your due diligence on suppliers. You have the right to find out how a business is performing. Plus if you're handing over $$ before the job is complete - list as a secured creditor. If you're an unsecured creditor you're at the bottom of the pile of secured creditors hoping for some $$ back.

Are there any other tips?

Donna

[Keys]

Consider putting the deposit into your solicitors trust account as proof you have the funds. To be released upon completion of the work.

[donna]

^^ I like it Keys - only I've experienced first-hand businesses saying they need the deposit to 'buy' the materials and it's hard to argue it.

Though, I have wondered about this practice as the business would not need to pay for the materials, etc, straightaway as they would have an account and pay within 30 days, aye.

The problem for customers is that when all of these businesses insist on $$ upfront, I can't see what you can do about it - other than make sure you choose the right business.

Donna

[Keys]

50% deposit on a $25k job is not chicken feed. If they have been in business long enough and, as you say, have trading accounts, nearly all jobs can be completed within the invoice parameters of their suppliers.