What advise does anyone have in relation to a s l o w paying gc.
I recently did a job for a company with scheduled draws of which only one was paid, at the beginning. I’m responsible for paying my crew, as well as tools and supplies for the job.
My part has now been finished for a couple of weeks, and each time I ask for payment, I’m met with some smart*
comment like “i’m not a bank, I don’t get paid till the job is complete “. If he doesn’t have financing, then why did he hire me ?
Well, my job is complete. Plumbing, electrical and A/C roughs are complete. Insulation and sheetrock are installed, but I haven’t been paid.
I sent an invoice stating payment was due and if not paid within 10 business days a 10% charge would be added I also stated that no payment within 15 business days would result in a 15% service charge. I was told I would be paid that week. Never happened.
Now I am at wits end and about to be forced to file a lien. Do I add the 15% that was added to the bill in the lien amount ? The gc says he will file suit against me on bogus damages and I’m out of money for a lawyer.
Anybody have any suggestions ??
Edited 11/9/2006 1:49 pm ET by KirkpatrickFramer
Replies
Did you have a contract with this loser? My suggestion would have been to stop working when the draws stopped, but you're beyond that point now.
jt8
"Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree." -- Dr. Martin Luther King, Jr.
First, what did your contract state in terms of payment?
Second, 10 days for payment ARI, is not realistic, nor is 15 days, unless someone specifcally agreed to in advance, and that seems very unlikely.
Live and learn and move on to the next job to get some money coming in.
Lien waivers will be required from every subcontractor sometime in the future. DO NOT SIGN it until the check has cleared. Lie to them if you have to. Do not sign that waiver "so they can process the draw" or some similr BS line. No money, no waiver. Pester them constantly, but keep the lawyers out of it for now.
Live and Learn sounds right, it's just really frustrating having so much invested into a job and not getting paid for it. Fortunately, I've got lots of work to keep me busy, but it's a real drag having alot of money tied up on something that would otherwise be xmas bonuses
"Lien waivers will be required from every subcontractor sometime in the future. DO NOT SIGN it until the check has cleared. Lie to them if you have to. Do not sign that waiver "so they can process the draw" or some similr BS line. No money, no waiver. Pester them constantly, but keep the lawyers out of it for now."That depends on who is paying for this.
"That depends on who is paying for this."
Since he mentioned (I thought) scheduled draws, I assumed this was going through a bank.
I don't run a construction business, but I do run a web development company and I've had my share of clients like your GC that promise to pay and fail to follow through on that commitment.
What I've found that works the best is to call them and let them know that you'll be coming over (that day, the next day -- your choice) to collect a check. Yes, it's time that you could be spending working, but better that than waiting by the mailbox. Most people will pay up this way.
For those that don't want to cooperate with that method, you can always try the method that worked for my grandfather. Show up at the beginning of the day, when they have enough staff, clients, customers around, and not too quietly announce that you are there to collect your debt. Not too many people are keen on looking like a welcher in front of others.
Good luck.
That sounds like a good idea, but I get the feeling I may be standing in a long line. I admit I made the mistake of doing a job for this guy, after he promised it wouldn't be like the last few jobs. He said he bought out his partner and I would only have to deal with him. This guy is from the Enron school of business, where he worked before becoming a builder. I have a feeling he pays himself with the concrete draw, pays the concrete guy with the framing draw, pays the framers with the mechanicals draw and somewhere down the line runs out of money and has lots of people trying to collect. I should've know better when my second wood pack came from a different vendor, as well as the third. Three lumber companies..... jeezThe thing that's a kicker is the job was a spec, but he sold it and was making changes to satisfy the new HO. So halfway thru the project it gets a total remodel. The wait goes on.....
I agree - he's got a cash-flow problem, and you're not going to be able to embarrass him much. My guess is he's got no change-order $'s in hand to handle the "remodel".If you don't think there's much work to come from him in the future, I'd contact the HO to tell him there'll be a lien on the property in 10 days. After 10 days, put on the lien. If you think there's any chance of the property settling before this, place the lien today.Let us know how this shakes out, will you?Brooks
File a lien now, today.
Tomorrow may be too late, your place in line may be at the end if you don't do something now.
Did I mention TODAY?
Don't worry about hurting his feelings, worry about eating.
Joe H
"after he promised it wouldn't be like the last few jobs....."
Fool me once shame on you, .... You know the rest.
Good luck.
If he is more than a 45 days out and being a jerk I would call the homeowners and the lending institution. He may not "be the bank", but in his draw requests he probably submitted a document stating the draw is for payment of work associated with whatever the draw is and he has paid those invoices in full.
Do not let a jack a$$ like that impact your business. If it is going to hit the fan, better chance of you getting your money now than later and also better for the homeowner's now than later.
I do not recall the exact amount of time you have to file a lein in Texas ( I should know but have never had to do it) but it is limited. If he starts threatening lawyer stuff, ask for his attorney's name so your attorney can send the letter directly to him. If he is bluffing it will be obvious, if he's not your probably going to be using your lawyer anyway.
Good Luck,
Bruce
File that lien ASAP and include any penalty money that is legitimate. Then be sure to remember all the things you told us that SHOULD have given you plenty of reason to tell him to pound sand when he said "it wouldn't be like before" it will ALWAYS be like before for guys like him. If you passed on the job instead of taking it, you'd probably telling us about the fish that got away over the weekend instead of chasing this fish to the courthouse. Good Luck, I hope you hang him out to dry!!
Geoff
I have an appointment with an attorney tomorrow.
I'm also considering talking to the realtor about what his customer may be looking at when closing time comes.I want to give him an oppurtunity, but I see that time has already passed.
It reminds me of the dog and snake story. Dog saves snakes #### only to be bitten. Then the snake says, well, you knew I was a snake.....
My son and his wife just got cheated out of $30K worth of work. As the previous thread says, some people have more experience at cheating you than you have at dealing with it.
I'll echo what others are saying: file the lien now. Here, it would cost me $35 and it's a very easy process. It gets me my place in line and there is nothing I need to do in the short term to maintain that place. In the long term I need to file a lawsuit, but I doubt it will come to that if you use forceful measures wherever possible.
So, file the lien, mail him a copy of that paper with the "recorded" stamp on it, and a letter requesting immediate payment.
Of course, all of this depends on your having filed whatever "pre-lien" paperwork properly with the owner. Here that means I need to give the owner a 1-page document with specific language on it before I start work. If I don't do that, I'm out of luck.
I'm a general contractor and I make my final payments to subs their last day on the job so they go home with the check. Sure I run into cash flow issues but that is what a line of credit is for. I keep an open line of credit with two banks that I can draw on if I get short. You will never get and keep good subs without prompt payment. I would get your money and then not take anymore work from this GC unless he will pay you a 95% deposit or something like that. No excuse other than he is running on empty and probably has a high probability of defaulting on everything eventually. Place the lien yesterday.
My father in law and brother in law were framers and they had a full proof method of getting paid - They showed up at the GCs home with shotguns in hand. I'm not sure exactly what went on there but they always returned with the money, and I never heard of police involvement. That would be your old school New York Sicilian method - just one option I guess. And I'm not making that up by the way.
Having some of that Italian blood in me (among other things) if people know you are just as crazy about your money as they are about cheating you, they may be a tad bit hesitant cheating you. If in any financial situation and you are upside down you lose.
Loitering at the customers home works well...of course with absolutely no violence in mind. chow stinky
How long exactly have you been waiting now?
Best I can tell from your post is about two weeks.
Obviously no one wants to have to wait for a final payment.....but two weeks doesn't seem excessively long to me.
Running a business requires that you keep a running balance in your business account. At least enough to pay your employees and suppliers. I try and make sure I have enough to pay my own salary as well. This way, when such delays in payment arise, it is only business profit that I am waiting for.
Of course....all of this requires that your contracts specify payment schedules and that you adhere to them.
FREE SPONGE BOB,SANCHO PANTS!
It's not a 2 week situation. He's close to 2 months behind on invoices. When I started the job, I layed out my conditions of a weekly payroll draw, based on hours worked. Invoices go in Wednesday, and are supposed to be paid on Friday. But then, two weeks go by between invoice and payment, then 3 more weeks before job is complete, and now it's been 6 weeks since I was paid for the first week of work. So basically I have 5 weeks of payroll and only 1 "weak" draw. I'm just getting really frustrated with the whole situation, and wanted to vent. Each week while on the job I would stress because I didn't know if I was going to get paid. When it's all said and done, I know I did what was expected and required of me, so I can sleep at night. And the other guy, well maybe he's got problems, too, but he's not doing right by anyone and I know it'll come back to him somewhere down the road.
Wow! two months!?!There are some states where you have already lost some of your rights. File that lien yesterday if you stil can!
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Most places I've been your lien rights start counting down from the last day on the job. If its been six weeks delayed pay from the second week of work but he worked for the GC last week his rights would probably be intact. His record of screwing around up until now would make me move fast to get filed.Jason
In CO, the right to file a lien when I was thgere ended thirty days after invoice date. In contrast, there are states where you have to wait thirty days after finishing the job to lien. Rules are all over the board. There are places where the clerk will allow you to file a lien and pay the buccks but will not inform you that it is no good or is good. That is not their job, It is the duty of the filer to know, and with things so variable, he needs to learn locally what the deal is. This is one part of business that has no single generic one size fits all rule on it, other than that free internet advice can be very expensive...
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
I feel your pain, I have one GC that owes me $20,000 for over 2 months.
All I have to say is he better find his check book fast.
I am tired of excuses and getting flat out mad now.
Good luck with your deal man. Hail to the victors.
When I started the job, I layed out my conditions of a weekly payroll draw, based on hours worked. Invoices go in Wednesday, and are supposed to be paid on Friday.
But then, two weeks go by between invoice and payment, then 3 more weeks before job is complete, and now it's been 6 weeks since I was paid for the first week of work. So basically I have 5 weeks of payroll and only 1 "weak" draw.
YOu were too eager.
When the contractor failed to pay on friday, you shouldn't have pulled out the tools on Monday.
blue
Reading through some of the other posts reminds me of a time an associate of mine was owed money from a dead beat builder from another state. Well, after many weeks of ... one morning he called the jack-a-lope up to see if his bill was processed. The guy said," it was sitting on his desk to go out." Well, David was calling him from a small airport here in greenville, S.C. Daves' friend is a pilot and was needing to put some time on his chart, Well 2 hours later dave was in Tnn. standing in the jack-a-lopes office getting his check. The guy lied about it being ready on the phone. But Dave didn't come back with out it. The dude never expected anything like this and was totaly caught off guard. He was stalling all the time on paying up. But when Dave showed up... I would have loved to have seen the look on that jack-a-lopes face.....
Like the other posts said unless you have a contract that specifies payment dates you may have a problem; this also applies to adding a penalty to non-payment, [it must be in the contract]. If the G.C. needs a release of lien for the draw, then he has violated the law if he dosn't have one from you. Bottom line is that you file a lien as fast as you can, make sure that you send a copy to the owners; they may be getting ripped off also. I don't know what the law is where you live, but some locals you have to re-file a lien like once a year; small fee. Lots of luck. ................................................. "If all else fails, read the directions"
I FEEL your blues. 20 some years ago, in a galaxy far far away, I too had that prob. At first the builder was glad to get you and would pay at the end of the week. The next job was, " we pay on thursday so have it in by monday" , then it was " We pay twice a month." Then it was ... Well you get the pic. That jerk used to drive a Ferrari. Thats how he paid for it. Tying up subs money and making money on the interest. He's long out of business. thank God. But the moral of the story is... If they want your services work directly for the client. YES you can do this. In commercial work maybe not all the time, but for the last 20 years, I recieve my check, upon services rendered, from the property owner. Stand your ground, mention payment methods in your proposals. And give small incentives to get paid early. Like 5% off for payments made before...Some companies can't do this type of book keeping..sure .. but those that can't... still remit to me by the end of the following week. EVERY time. I have one client that has 67 locations, big business. Done their work for over 10 years. Bill them by, say, tues. the end of the next week their calling me to pay me. But that prob. comes with a long term bus. relationtionship. Just tell your clients that your a small outfit and your unable to do the 30, 60, or God forbid, the 90 day wait. personally, I don't play those games. I consider myself a professional. Have you seen those signs at your doctors offices? " Please pay upon services rendered ?" But what ever you do get your payment schedule in your terms, not theirs, ON PAPER. sorry for the rant. been there, done that. Got tired of it, QUIT!
Hey Bro, That was some powerful stuff. And very true. As far as dealing directly with client, what you say is golden. It resonates in me with my own convictions.
Thank you for your reply. Hearing that makes it all worth while. Because of the many difficulties involved with getting paid, I focus mainly on upfit or remodels. There are a few areas of new constr. that I do. But that is mainly with established clients that I've trained to my payment methods. Look, I don't want to come off as a pre-madona, but, you might want to think about doing the same. When I started professionally in this area, the only work I could get was what the good 'olboys' system couldn't or wouldn't do. So I carved out a NICHE. And I carved as big as I could. Of doing that type of work. The " wouldn't " work the others would not do was because it was too small for them to make money. They'd have a huge crew and overhead, vs. just little 'ol me. I can give the client more personal attention. Not to mention attention to detail. The client knows who's in their house. NOT a heard of turtles. I can get more done with a methodical method or application of materials than 3 laborers doing the same tasks ALL day long. And they'd still miss stuff. I know, I've had as many as 18 people empolyed at one time. It just becomes a baby sitting service. That you pay them to be at. SCREW that. Do your own work, hire a reliable helper that you can train, and trust in some ones home, and can be flexible with schedules. Students work real well. I did it again, maybe I should write a book. Sorry for the rant
Brooks