Your Payment Options

Typically, you have several payment options when it comes to home repair, improvement and maintenance projects.  For small projects, you may want to consider paying with a check or credit card.  Avoid paying cash in case there is some problem with the project or the contractor decides to say they never received the money.  Checks and credit cards offer a “paper trail”.  For a larger project, you may want to get a loan to pay for the whole thing or you might want to consider asking the contractor if they will arrange financing.  Whichever way you decide to pay, always make sure that your payment schedule is reasonable and your interest rate is fair.  Additionally:

• Limit the down payment. The state may limit the down payment a contractor can demand.  You will need to contact your state or local government agency to see what the law is in your area.
• Make payment arrangements contingent on the completion of a specific amount of work. For example, when the kitchen cabinets are in, you will pay this much.  When the kitchen flooring is completed, you will pay this much.  That way, if the work is delayed, your payments will be delayed as well.
• Only make the final payment after you are completely satisfied with the work and know that all subcontractors and suppliers have been paid. Don’t even sign off on any final paperwork until you find out about the subcontractors and suppliers and you are happy with what has been done.  Otherwise, you can be held responsible for the unpaid goods and services that were occurred by your project via a mechanic’s lien on your home.
• The final bill cannot exceed a certain amount over the estimate by law. The exception, of course, is if you requested extra work.  Some states limit the amount the final bill can be above the original estimate.  You will need to check with local government to see what those limits are in your area.
• If you pay for services or merchandise with a credit card and have an issue with the goods or services, you can withhold payment to the credit card company for those goods or services. This only applies if you have tried to resolve your issue with the seller of those goods or services and were unable to come to a resolution.  Contact your credit card company to find out more about this.

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