How much deposit should I pay a renovation or fit-out contractor?
As little as the work genuinely requires, and ideally only against materials delivered or work done. For home renovation, CaseTrust-accredited renovation businesses cap the initial deposit at 20% of the total cost and must buy a deposit performance bond protecting deposits against closure, winding up and liquidation. For commercial works, link payments to monthly valuations or measurable milestones, and if an advance is unavoidable, ask for a matching advance payment guarantee from a bank or insurer.
From the RRD Field Guide, checked against the sources cited in Contractor Insolvency in Singapore: How Owners Protect Themselves If the Contractor Goes Bust. General information, not advice for your project.
The fuller picture
If your contractor becomes insolvent, the money you have not yet paid is your main protection. Pay only against work done, hold a performance bond and check its expiry, keep the right to terminate and step in, and use SOPA section 24 to pay unpaid subcontractors directly where needed. Anything the insolvent contractor still owes you becomes a proof of debt in its liquidation, usually recovered at a fraction.
More questions on this topic
- My contractor has stopped work and is not answering. What should I do first?
- Can I call the performance bond if the contractor goes into liquidation?
- What is SOPA section 24 and how does it help an owner?
- Can my contract say I may terminate if the contractor becomes insolvent?
- How do I claim money from a contractor that is in liquidation?
- What happened with Greatearth in 2021?
- Will a replacement contractor cost more than the original?