Customer won't pay bill [Archive]

Sonny Boy

01-17-2007, 11:53 AM

I have a customer who refuses to pay the bill that covered excavating a trench 40' long x 3 feet x 2 feet wide (Utility requirement), installed 3" Schedule 40 PVC from the utility transformer location to the 100 amp meter base on the customers building (Home Depot Red Barn), installed a 8/16 space 100 amp main breaker service panel, 3-20amp branch circuits and 1-30 amp branch circuit. Provided branch circuits for future heat and A/C.

I hired an excavating contractor to dig the trench and the bill was 300 bucks to dig and backfill the trench. I researched what it would cost if I and the customer rented a backhoe and did the trench ourselves. The cost would have exceeded the excavators charge.

The customer gave me a 500 dollar deposit prior to starting the work Any ideas how to resolve this situation?

And no, I didn't sign a contract for the work (kicking myself in the azz!). I offered to write up a contract but he said there was no need. He said he would fire me if he wasn't "happy" with my work.

Thanks,
Mike

1793

01-17-2007, 12:01 PM

...he said there was no need. He said he would fire me if he wasn't "happy" with my work.

Sounds like he did just that.

A contract protects not only the customer but you as well.

Sonny Boy

01-17-2007, 12:37 PM

Sounds like he did just that.

A contract protects not only the customer but you as well.

My first and ONLY time I didn't have a contract. Fool me once....

Luketrician

01-17-2007, 12:45 PM

Contracts, IMO are not a full proof way to ensure payment. Hopefully you can reason with your customer to "make him happy"..btw what was the reason he refused to pay?

Sonny Boy

01-17-2007, 01:56 PM

He didn't like my total labor hours, which I reduced $150.00, and the 300 bucks for digging and backfilling the trench.

Luketrician

01-17-2007, 02:12 PM

Let me guess, the customer thinks the manhours should be ridiculously low. Which probably equates to a real rip-off for you. I realy hate to see others getting taken advantage of, esp in the buisness we are in. You may be better off in taking what this creep is willing to give you for payment and learn from it for next time.

growler

01-17-2007, 02:21 PM

What were the total labor hours for a 100 Amp. service? Total Cost?

I normally bid a job like this with the customer knowing the cost up front. The cost may be high but if they are going to choke I would rather they do it before the work starts.

How much is the customer willing to pay? I may agree with Luketrician.

big vic

01-17-2007, 03:05 PM

He didn't like my total labor hours, which I reduced $150.00, and the 300 bucks for digging and backfilling the trench.

Why would you reduce it????? Doing that just justifies what the customer already thought.............you overcharged him.

I try to get almost all my money before I call for an inspection. At least it gives you some leverage

allenwayne

01-17-2007, 04:13 PM

Sounds to me your customer intended to do this from jump street!!!!! Otherwise why on earth would he not want a set in stone contract, without which you don`t have a leg to stand on.He/she knew this and planned no matter what to pluck you for whatever he/she could.Take what you can get and learn a valuable lesson from it.Sure you could take him/her to court but it would your word against his/hers.

ruferil

01-17-2007, 04:58 PM

petersonra

01-17-2007, 05:10 PM

IMO you encouraged him by agreeing to lower your price.

I think it is foolish to go into any such arrangement without both parties having a clear idea just what the charges are going to be, and what those charges include.

Any adders should be pointed out as they appear. One of the things customers have a real issue with is they get an estimate of $1000 for a T&M job, and get a bill for $3000, with little in the way of notice along the way that the extras are adding up.

muskiedog

01-17-2007, 05:42 PM

REPO your work. If he didn't pay for the materials and man hours start disassembling.

infinity

01-17-2007, 05:57 PM

REPO your work. If he didn't pay for the materials and man hours start disassembling.

In some jurisdictions that is illegal. And regarding small claims court, if your company is incorporated you will probably need an attorney.

iwire

01-17-2007, 06:03 PM

REPO your work. If he didn't pay for the materials and man hours start disassembling.

Here depending on the situation that could be viewed as theft.

We usually get paid monthly on jobs. If they have been paying each month much of that installed equipment is already theirs.

Sonny Boy

01-17-2007, 06:43 PM

cowboyjwc

01-17-2007, 06:43 PM

petersonra

01-17-2007, 06:50 PM

and learn from this incident.

He agreed to pay 250 bucks for the backhoe work. I'll ask the excavator if he can reduce his bill by 50 bucks.

He wants me to sign a release of lien? I'm thinking if he pays in full, why do I need to sign the release.

I have to go to the customers place Friday to set GFCIs and check out the rest of the installation.

Thanks for the advice.

Mike

A waiver only gives a limited amount of protection to a customer unless it is accompanied by waivers from the people who supplied you the materials.

But on a small job, I agree there is not much benefit as long as he can prove he paid in full.

growler

01-17-2007, 06:56 PM

I once knew a guy that hired a company that guaranteed to get his money. The next day they showed up handed him his money, less their cut of course, and later he read in the paper where his customer was found beaten in his driveway.

Is this company still in business? I like their sincerity and professionalism.

Sonny Boy

01-17-2007, 06:56 PM

What ever you do, have an alibi. : )

I once knew a guy that hired a company that guaranteed to get his money. The next day they showed up handed him his money, less their cut of course, and later he read in the paper where his customer was found beaten in his driveway.

I had a brief thought to go out there and cut all the cables at the outlets and service panel? But I've been told by people that I have too much Catholic in me.

satcom

01-17-2007, 07:35 PM

Small claims court is relatively simple and inexpensive. No lawyers can be involved

Not in my state, if your a corporation, professional, or LLC you need an attorney in small claims court, every state, has different laws.

Oakey

01-17-2007, 07:45 PM

How much did you charge him for this job? Or did I miss that post..
Most of us just did quartely taxes and a reduction in price would not happen right now :-o

1793

01-17-2007, 07:58 PM

and learn from this incident.

He agreed to pay 250 bucks for the backhoe work. I'll ask the excavator if he can reduce his bill by 50 bucks.

He wants me to sign a release of lien? I'm thinking if he pays in full, why do I need to sign the release.

I have to go to the customers place Friday to set GFCIs and check out the rest of the installation.

Thanks for the advice.

Mike

If he fired you and won't pay why go back to finish? Could hold this as a bargaining chip?

celtic

01-17-2007, 08:40 PM

He wants me to sign a release of lien? I'm thinking if he pays in full, why do I need to sign the release.
Exactly...why?
Not why do you have to sign the release, but WHY is he in such a hurry?

I have to go to the customers place Friday to set GFCIs and check out the rest of the installation.

I wouldn't be going over there with any intentions on working....at this point, let HIM pony up ALL the money and then you'll see where he is on your schedule.

Sonny Boy

01-17-2007, 08:58 PM

I wouldn't be going over there with any intentions on working....at this point, let HIM pony up ALL the money and then you'll see where he is on your schedule.

I'll have his check in my pocket before I finish the job.

Besides, I want to check out the finished product.

brian john

01-17-2007, 09:52 PM

1st This guy is a lying cheap SOB that knew from the beginning what he was going to do.

2nd I would never ask my sub to eat something that was my problem and responsibility, unless you have other work where you would use him allowing him to make it up.

3rd Not sure where you live, but 300.00 dollars to excavate, seems WAY TOO LOW.

4th I would not finish the job or get the final inspection till you resolve this issue, you can do court, but I say cut your loses. If the bill is 1000.00 he wants to pay 750.00 get 900.00.

5th Small claim court rules vary from state to state, check your states website.

Sonny Boy

01-17-2007, 10:08 PM

2nd I would never ask my sub to eat something that was my problem and responsibility, unless you have other work where you would use him allowing him to make it up.

I'm paying the sub 300 bucks.

3rd Not sure where you live, but 300.00 dollars to excavate, seems WAY TOO LOW.

It is cheap. He said he could of hired a local guy for 200 bucks.

4th I would not finish the job or get the final inspection till you resolve this issue, you can do court, but I say cut your loses. If the bill is 1000.00 he wants to pay 750.00 get 900.00.

The work passed the PoCo and State inspections prior to the disagreement.

5th Small claim court rules vary from state to state, check your states website.

That may be an option.

Sonny Boy

01-19-2007, 01:50 AM

I'm going to tell the customer I want cash before completing the work and signing the release of lien.

Minuteman

01-19-2007, 08:48 AM

I learned this from a collection agency. Have your CPA send this guy a 1099 for the whole amount. The law recognizes the fact that a person cannot be unjustly enriched. You produced labor and material, therefore, he has to report it on his taxes, and you can deduct it on yours.

bradleyelectric

01-19-2007, 11:18 AM

What ever you do, have an alibi. : )

I once knew a guy that hired a company that guaranteed to get his money. The next day they showed up handed him his money, less their cut of course, and later he read in the paper where his customer was found beaten in his driveway.

Anyway I can get his collection agents #? Noone I have ever tried to use has ever gotten me a dime. I would not have any remorse over anything that happened to someone that desided to rip me off. We do a quality job at a fair price.

renosteinke

01-19-2007, 01:43 PM

I learned long ago that there are folks out there who deliberatley look for others to victimize. These folks know all the rules full well beforehand, then deliberately lead you into breaking them ... laying the groundwork to screw you later.

For example, they search out unlicensed contractors. No license, no right to lien, no need to pay. They then dribble out just enough cash to keep the job going, and follow that with defer, delay, excuses ... until finally telling you to get lost.

A written contract can help define just what the agreement is between you and the customer. Folks are simply famous for loving you up to the moment they get a bill; then they find all manner of faults. Even if it's just "your word againt his," take him to court. Let him do his own lying. Even if the judge believes him, you've made him work for it.

If you can lien, do so. Make sure you meet any deadlines, etc... no matter what promises the customer has made. "I'll pay you Friday" is no help if you can't file a lien after thursday!

If you've been working illegally, well, you just out-clevered yourself.

Claiming someone else has a better price after the job is done is meaningless. If, in hindsight, he wanted to make a different choice, that's HIS problem.

This job is a good example of the advantages of a 'simple price,' as opposed to 'time and meterials.' T&M, or breaking out other expenses, only opens the door to dispute.

Hiring the "goon squad?" Don't you think this would be the preferred and legal means, if it had any value? Look how well that sort of think has worked for the Balkans.
You DO have "goons" on your payroll. They carry badges and take orders from judges. Use them.

Finally, there is a very real value in keeping a detailed, daily log of a job. You must note every change, every complication, every discussion with the customer. Later, should there be a dispute, the log will be a great aid to persuading others that your claim is just.

Personally, if a guy goes out of his way to say we don't need a contract, I would see that as a major red flag. Likewise, any attempt to get you to do something wrong, or possible unethical. A crook is a crook is a crook....

cdslotz

01-19-2007, 02:45 PM

It is cheap. He said he could of hired a local guy for 200 bucks.

Tell him he should have hired the other guy, but he hired you, and you charge 300 bucks.
He's lying. 300 is too cheap. 200 is a lie.

dcooper

01-19-2007, 09:02 PM

How much was the whole job?
Don't get a final inspection.... you can't sell a house or refi a house with an open permit in Mass.
Don't go back there! JUst cut your losses and walk away.
All time time you spend talking about it, worrying about, going to court or anything is TIME..... I get paid for my time. Is it worth all this for $300 or $100 NO WAY.
Take it as a learnig experience and move on. Somday he will get his.....

I've been beat out of thousands by customers......Ya live and learn

Sonny Boy

01-19-2007, 10:31 PM

If you've been working illegally, well, you just out-clevered yourself.

I'm a licensed and registered Washington state electrical contractor.

Have had 4 jobs inspected and passed already in my short time as a contractor.

I rely on the cutomer to pay the bill pronto. That's money I use to start my next job. I haven't been doing this long enough, or had enough money jobs, to have a sizeable bankroll.

mxslick

01-20-2007, 12:58 AM

When running advance screenings or "dailies" for studios. There were a few who were notoriously slow in paying.

So my solution was simple: a check in hand by the end of the screening, or I confiscate the film print until I get paid.

Out of several screenings (100 or so) I only had to do that three times. (Twice with the same studio.) The second time on that particular studio I held that print for over four months until they finally sent a courier with cash and I gave them the film.

I now have a great working relationship with that same studio.

I do agree with those who have said so far that you shouldn't go back to do the finish until this joker pays up.

big vic

01-20-2007, 08:51 AM

Seems strange to me that the POCO would require a trench 2' wide

At least four people have asked what you charged for the entire job. Is it a secret????

iwire

01-20-2007, 09:27 AM

Arc faults are going to be the airbags of the electrical industry.

If they save as many lives as air bags have how would that be bad?

I just doubt that they ever will.

petersonra

01-20-2007, 03:43 PM

Not in my state, if your a corporation, professional, or LLC you need an attorney in small claims court, every state, has different laws.

And in most states, the defendant can opt for normal court. The scam artists will do that to discourage the use of small claims court by all but forcing one to have a lawyer, which makes the cost and time commitment impractical for relatively small amounts of money.

Sonny Boy

01-20-2007, 04:05 PM

Seems strange to me that the POCO would require a trench 2' wide

POCO requirement is 18 inches wide. Hard to find a bucket that's 18" wide.

At least fout people have asked what you charged for the entire job. Is it a secret????

$1800 including taxes, excavating and backfilling.

brian john

01-20-2007, 05:40 PM

If they save as many lives as air bags have how would that be bad?

I just doubt that they ever will.

Maybe not in the short term, but as time passes respect for the available energy may help some. There are those that will always take chances or worse yet get involved in something they have no business looking at, just because someone is an licensed electrician does not qualify them to perofrm all types of electric work.

I have followed up on several projects were electricians were killed, several wher the injuries were massive, and several where the electricians were just plain lucky. If I could avoid those jobs I would be a happier man.

dcooper

01-20-2007, 06:31 PM

what's the balance he owes you?

Sonny Boy

01-21-2007, 12:14 PM

what's the balance he owes you?

He gave me a $500 deposit so the balance is $1300.

bradleyelectric

01-21-2007, 12:28 PM

POCO requirement is 18 inches wide. Hard to find a bucket that's 18" wide.

$1800 including taxes, excavating and backfilling.

You were to cheap to start with. Price has little to do with weither someone will be happy with your price or not or weither they will pay you or not.

Sonny Boy

01-21-2007, 07:06 PM

You were to cheap to start with.

I said I'm just starting out. Gotta pay the bills and put food on the table.

How much would you have charged?

Price has little to do with weither someone will be happy with your price or not or weither they will pay you or not.

The customer wasn't happy with the price.

bstoin

01-21-2007, 07:58 PM

My advice to anyone at a "bargaining table..." If a customer isnt happy with your price, explain in further detail what it is you have to do, explain the costs of whatever material is required to complete the project, etc. If they still want to haggle, walk away. I have done this myself. There is no point working for free, otherwise you might as well stay home and watch TV. Why of spending hours or days working on a job with no profit when you can beat the pavement and find someone willing to pay you what your worth? Another word of advice...it's all about presentation. Remember, when you are giving a bid to someone, you must cease from being an electrician and become a salesman.

growler

01-21-2007, 08:36 PM

Remember, when you are giving a bid to someone, you must cease from being an electrician and become a salesman.

This is very true. Just like a saleman I try to find out how much the customer is willing to spend before starting a job ( or can afford to spend ). This has saved me many times. You wouldn't believe the low job cost that I have gotten from customers as far as to what they were willing to spend. Things like 3K to rewire a whole house. If this is what they think then you bid them good day and head on down the road.

If you think you can do a job for $1800.00 then you give an estimate of $2500.00 and bill for $2450.00. There is no reason for the customer to complain because you are under the estimate.

Added advantage: There is a little room to negoiate before getting to actual cost.

bstoin

01-21-2007, 10:16 PM

This is very true. Just like a saleman I try to find out how much the customer is willing to spend before starting a job ( or can afford to spend ). This has saved me many times. You wouldn't believe the low job cost that I have gotten from customers as far as to what they were willing to spend. Things like 3K to rewire a whole house. If this is what they think then you bid them good day and head on down the road.

If you think you can do a job for $1800.00 then you give an estimate of $2500.00 and bill for $2450.00. There is no reason for the customer to complain because you are under the estimate.

Added advantage: There is a little room to negoiate before getting to actual cost.

Yes...we are on the same page. When I give someone a bid price, it's usually just a little bit high. I do this purposely because 1) covers myself for a slight mistake (forgot to add the breaker in the price, etc) 2) when I give them the final bill it's a little less than what I had quoted them. I let them know that "it wasn't as bad as I thought it would be." You wouldnt believe how many referrals and how much repeat business I get doing this! Instead of being viewed as a criminal ("sorry Mr Smith, I underbid your project, you need to pay me an extra hundred bucks") I come out the best thing since sliced bread ("guess what Mr Smith! I erroneously gave you a price that was too high, please make the check for $600 NOT $700")

Sonny Boy

01-24-2007, 12:47 AM

wisdom.

I do know that the next time I do an underground installation the customer will be responsible for the excavating. Or, he/she will sign my contact that says they will abide by the cost of me getting it setup and done.

I'm learning to be more of a salesman when it comes to bidding jobs.

DHkorn

01-24-2007, 08:04 PM

I don't know the laws in your area. In Illinois we send a mechanics lien notice within 90 days after we leave job if we are not paid. My contracts are 30 days and I send them at 45. It's really two copies, one to the guy who hired you and one to the owner of the building. Have them notorized, sealed, and sent registered mail. I have gotten many angry responses, but I always get responses. You did have a contract, it was verbal. Secondly, be a real pain in the ass. I am unrelenting. If he gave you a check for the deposit you know where he banks. Find a reason to call his banker. When the banker hangs upo with you, he'll call him. If a builder give me BS, I ask the name of the person responsible for paying them. Then I call them. If the story doesn't check out it gives me somewhere to go.
A lot of my friends tell me that I just P***-off my customers. I say so what? What am I losing, someone who doesn't pay? Who cares. Get paid. Thats the only reason we take jobs in the first place, isn't it?

olmsted

01-26-2007, 12:56 AM

Hire some help from the local Home Depot and go dig up the raceway
Cut your losses at that

Kessler4130

01-26-2007, 08:41 AM

Small claims court is relatively simple and inexpensive. No lawyers can be involved so cost is really low. I believe verbal contracts can be just as binding as written ones. Might be worth a shot. Once the guy receives the court papers, he may be more willing to settle up. Never know what skeletons he has in his closet.

I believe in Maryland as long as there was a witness, verbal contracts are binding, but no witness.... no contract.

Sonny Boy

01-26-2007, 12:48 PM

Hire some help from the local Home Depot and go dig up the raceway. Cut your losses at that

Job's complete. He paid me with a cashier's check.

1793

01-26-2007, 01:56 PM

Job's complete. He paid me with a cashier's check.

Good for you. Now you can move on to make some more money. :D :D

haskindm

01-26-2007, 03:14 PM

I used to work in the automobile business and one tip that my boss gave me was to NEVER lower your price without a reason. Tell the customer that just offers you $100 less for the car, "OK, I can take another $100 off, but I can't include the floormats (or the full tank of gas, or somthing else) for that price" and stick to it. Otherwise the customer will almost always come back and ask for even more. Most customers have not got a clue when it comes to a "good price". They assume that anything that you charge is 100% profit and will never be satisfied unless you convince them that they will have to give up something for the price to go any lower.

calepore123

02-06-2007, 02:09 AM

Small claims court is relatively simple and inexpensive. No lawyers can be involved so cost is really low. I believe verbal contracts can be just as binding as written ones. Might be worth a shot. Once the guy receives the court papers, he may be more willing to settle up. Never know what skeletons he has in his closet.

If that not working take the meter ! I installed a hot tub for a guy like this .and the same thing happend . he called the cops they made him pay .

tnt8197

02-06-2007, 07:38 AM

Get your attorney to file a lien on the property. Even without the contract, they should be able to provide a notice of furnishing to the owner of the property, and subsequently, file the lien to protect your money. I would not have any further discussions with your customer, until the lien is filed, than you will have some ammuntion to go back at them with. Sounds like your customer is just dialoging with you to get you past the 90 day last day worked mark. File the lien immediately!

oldno7

02-06-2007, 09:06 AM

nysprkdude

02-06-2007, 03:38 PM

First and foremost, you always write up a contract with a price, wether it's a set price or agreed t&m. That's your ticket to getting paid, or putting a lien on his property.
You tell the customer that it won't be inspected or energized utill he pays in full. Also, you NEVER reduce your price if the customer complains, because then your telling them that you tried to over charge them!!

As an inspector in New York, I can tell you that here, an electrical permit is attached to the property, not the electrician.

If the property owner calls for an inspection...I am bound to provide such.

So......using the "no inspection until I get paid" routine is a minor bluff that may or may not work.

Bottom line....

Document Everything!

Get a substantial down payment.

If the customer is unwilling or unable to do so....it should raise some neck hairs.

Never.....I say never sell yourself short!

Your prices should reflect your comittment to your profession and your integrity.

When we allow people who are often professionals at "bargaining down the price" to do so.....we are compromising our integrity!

If "Joe So and So" would do it for less money....then by all means hire him!

I know that trying to establish one's self is tough...but take the obstacles you encounter and learn from them.

'nuff said!

dduffee260

02-06-2007, 08:50 PM

As an inspector in New York, I can tell you that here, an electrical permit is attached to the property, not the electrician. If the property owner calls for an inspection...I am bound to provide such.

So you are telling me that if the electrician is not ready, even though it is their license on the line, and insurance. You have to inspect it? You may not pass it. Around here there were a few GCs calling in rough-in inspections on our projects. We stopped that circus fast.

It is my business, it is my permit, it is my license and I will call in for an inspection when I am good and ready, and not one minute sooner. Call one in on me and I will call the inspector and tell them to turn around and go back or red tag it, because it is not ready for inspection. Then I will invoice the person who called in the inspection before it was ready.

romexking

02-07-2007, 10:34 AM

I agree with dduffee 260. The license holder is responsible for the proper installation of the work, and therefore should make the final determination as to when the installation is ready for inspection. If the job fails an inspection for not being ready, who is responsible for the re-inspection fee? I doubt that it goes to the property address. I think you shoud re-evaluate your policy of who can call in an inspection.