Landlords, be wary of giving handymen big deposits: Consumer Protection

Landlords, be wary of giving handymen big deposits: Consumer Protection
Jennifer DukeDecember 7, 2020

A 78 year old Western Australian investor with a rental property in Carlisle contacted Michael David Wells, St James, after he had advertised his home repair services on noticeboards in Carlise and Brentwood.

In March 2013, she was given a quote of $1,200 to repair the roof and gate at her rental property, through her son who contacted Wells, and paid a $500 deposit.

The work was never carried out.

Another property owner from Brentwood contacted Wells in January this year for a ceiling repair at the home she owned with her partner. He quoted them at $1,300, and the woman paid a $600 deposit.

Wells again failed to do the works.

He has now been fined a total of $4,000 by Perth Magistrates Court, and ordered to pay $1,100 in compensation to the customers.

The total included two $2,000 fines on two charges of accepting payment without providing goods or services, which breaches Australian Consumer Law. This fine was given to Wells on 10 October. He has to compensate the consumers for their deposits and pay costs of $754.

Consumer Protection acting commissioner David Hillyard said that large deposits always carry a risk. However, this doesn’t excuse the actions of those who fail to carry out the job after taking the funds.

“Your rights under the Australian Consumer Law mean that work must be carried out within a reasonable amount of time, or finished by the completion date stated in the contract,” Hillyard said.

“As a general rule, big deposits are a bad idea. If a deposit is necessary to secure a sale, we recommend only paying 10 per cent, maybe more if the goods you are purchasing are being custom-made or the services require expensive materials to be purchased specifically for your job,” he said.

He suggests that consumers consider using a credit card, as if something goes wrong there may be the option of a chargeback from the credit car provider. This is not an option when paying by cash or direct bank transfer.

“Paying the full amount up-front is an absolute no-no. It means you lose bargaining power in terms of getting what you paid for within an agreed time-frame. You should only pay the balance on delivery of goods or completion of work,” he said.

Here are six tips to protect yourself:

  1. Never pay the full amount up front for goods or services yet to be supplied.

  2. Do not to pay more than 10% deposit (building contracts for amounts over $7500 are covered by the Home Building Contracts Act and deposits must never exceed 6.5% of the contract price).

  3. Explore the option of progress payments e.g. when materials have been supplied or partial work is done.

  4. Only pay the balance upon delivery of goods or completion of work.

  5. Consider the benefits of using a credit card to pay a deposit, as you may be able to seek a charge reversal if there is non-supply or if the business goes under.

  6. Don’t be pressured into paying a high deposit and if you feel uncomfortable about a deposit request, talk to Consumer Protection.

Source: Consumer Protection

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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