A homeowner may be asked for a deposit before materials are ordered or work begins. The key issue is not simply whether a deposit is normal, but whether the amount, timing and payment structure are appropriate for the particular contract and applicable law.
Before paying a contractor deposit
- verify the contractor’s identity, business details and relevant licence;
- obtain a written quote or contract;
- understand what the deposit covers;
- check the permitted deposit and progress-payment rules for the work;
- agree to what happens if the project changes or does not proceed.
Why homeowners can be uncomfortable paying first
A direct advance payment transfers money before the corresponding work or handover has even occurred. For larger projects, this can create significant risk.
Where escrow may help
For an eligible transaction where the payment arrangement is lawful and appropriate, escrow can allow agreed funds to be secured before later settlement. It does not replace the building contract or statutory payment requirements.
Does GoEscrow decide whether work is complete?
No. GoEscrow manages the financial interaction. It does not inspect work, certify completion or determine workmanship.
Related information
See Paying a Contractor or Tradie and Progress Payments and Staged Payments.
Product information
Review the Product Disclosure Statement, Financial Services Guide and Terms of Use.