Should I pay my contractor a deposit upfront or pay as the work gets done?

Most reputable contractors will ask for a reasonable deposit to secure materials and scheduling, but the majority of payment should be tied to completed work milestones. A balanced payment schedule protects both you and your contractor while maintaining proper cash flow for the project.

In New Brunswick, a typical payment structure might include a 10-15% deposit upon contract signing, followed by progress payments at specific completion stages - perhaps 25% when materials arrive, 25% at rough-in completion, 25% when work is substantially complete, and the final 10-15% upon final inspection and your satisfaction. This approach ensures your contractor has working capital while giving you leverage to address any issues before final payment.

Be cautious of contractors demanding large upfront payments - especially more than 25% of the total project cost. Under New Brunswick's Construction Remedies Act (which replaced the old Mechanics' Lien Act in 2021), you have specific rights regarding payment disputes, but prevention is always better than legal remedies after the fact.

For electrical, plumbing, or gas work requiring Technical Inspection Services (TIS) inspections, consider holding back a portion until all required inspections pass. Similarly, if your project needs municipal or Regional Service Commission permits, ensure these are obtained before making substantial payments.

Verify your contractor's credentials before any payment: check their WorkSafeNB coverage (mandatory for employers with 3+ workers), confirm any required licensing through TIS for electrical/plumbing/gas work, and ensure they have proper liability insurance. A legitimate contractor will readily provide this documentation.

Your next step: Ask potential contractors about their standard payment schedule during the quoting process. A professional will explain their terms clearly and be willing to put the payment schedule in writing as part of your contract. If someone demands full payment upfront or seems evasive about payment terms, consider that a red flag and get additional quotes from other contractors in our New Brunswick directory.

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