The deposit isn't too bad, but the payment of $19,200 before ANY work is
done is not advisable at all.
A more fair approach would be about $15,000 after 1/3 is done, additional
$15k after 2/3, and the balance 2 weeks after completion.
It would be nice if both parties could agree on the designation of a third
party such as a home inspector or roof inspector, to be the arbiter of the
completion schedule. Talk to your banker, who may suggest the third party,
with industry experience that could be helpful. Your roofer may be made
to feel more secure if you could put the money up with your bank, to be held
in trust pending percentage completion, as confirmed by the bank's
verification of the work done. You may also want to talk to your county
building inspector for ideas and suggested inspectors.
One of the very most important aspects of your job now is to make absolutely
sure that you comply with the Mechanic's Lien Law of your state. If you
don't, you could end up paying twice, once to the Contractor and secondly to
roof suppliers of materials and laborers. Once again, your bank would know
how to meet these requirements. In most states, you need to file a Notice of
Commencement, and then obtain what is called a Contractor's Affidavit,
before you make the
interim and final payments. The Contractor has to swear under oath that he
has paid everyone else, before he accepts payments from you.
You need to consult with a Lawyer in your area, and/or with your bank.
These are only general ideas, and please follow the advice of your lawyer.
Good Luck !