What should I check about a renovation company’s deposits on jobs not yet started?

Ask for a schedule of contracted jobs: customer, scope, price, deposit received, scheduled start and the estimated cost to complete. Read a sample of the contracts to see how changes, delays and cancellations are treated, and whether the customer has any right to end the agreement.

Follow the cash. Deposits taken on future work are not earnings yet, but a seller may have used them to pay bills or finish another job. If the money is gone, the sale price or closing adjustment should reflect that. Your accountant can show how, and your lawyer can write it in.

Check whether the price still covers the work. Materials and labour can change between the day a job was quoted and the day it starts. Ask how the seller handles that and what customers have been told. Look at the people who deliver. Confirm that the crews, trades and subcontractors for those jobs will stay and that any supplier orders are in place. Talk to customers with the seller’s help so they know who is doing the work. Ask about permits and approvals that those jobs may need, and who was meant to arrange them. A job held up by paperwork leaves a deposit sitting with a frustrated customer. Your lawyer or the relevant office can tell you what applies.

Key takeaways

• Get a schedule of signed jobs with deposits and completion costs.
• Confirm where the deposit cash actually is.
• Check whether the original price still covers the work.