deadbeats

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Energy-Miser

Energy-Miser

Senior Member
Location
Maryland
What do you guys do with those who just plain don't pay? I looked at hiring an attorney (the GC owed me $3500 per signed contract, still does) but quickly found out that at the rate they charge ($300 / hr in our area), I would quickly lose money even if he collected for me from the GC. I subsequently contacted a collection agency, who if I remember right will take 40 or 50% off the top, but haven't heard what they have or have not done since I referred the GC to them. e/m.
 
480sparky said:
I recently asked the same question:

Collection Agencies
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Thansk I checked it out, the exchanage of ideas there was very useful. I still have one question though. Is the lien thing only for commercial outfits or is also applicable when you do a residential job as well? And second, how is it that a lien against property will pressure the GC to pay you, as it is not his property that the work was done on? Thanks, e/m.
 
Energy-Miser said:
Thansk I checked it out, the exchanage of ideas there was very useful. I still have one question though. Is the lien thing only for commercial outfits or is also applicable when you do a residential job as well? And second, how is it that a lien against property will pressure the GC to pay you, as it is not his property that the work was done on? Thanks, e/m.
Click to expand...

Lien laws vary by state, but if you place a lien on property that isn't the GCs, the owner is going to call up the GC very quickly. Pressure from their side may get him to pay up.
 
First, in all of your Proposals or Contacts, have a clause regarding reasonable attorney's fees if they default (don't pay). If you do not have this clause, you will NOT be able to sue for attorney's fees. I also have a clause that by sending a contract in the amount of my Proposal, they have agreed to all terms of my Proposal, whether they sign it or not.

I have a GC I am suing for $74,000, including interest, plus attorney fees, and fortunately for me, they are the only GC in 11 yrs to have actually signed my Proposal. We fully expect to win the entire amount, but collecting will be a completely different story.

Second, whether your contract is with the GC or property owner, the property owner is ultimately responsible for paying you. They may have already paid the GC for your work, but if you haven't been paid by the GC, the owner will have to pay you again. That is how it motivates the property owner to get the issue resolved.
 
480sparky said:
Try looking at Mike's Sample Proposal for similar wording that you will need.

It's best to pay an attorney for a couple hours of time to write up a legal proposal that will stand up in your state.
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Thanks, yes looks good. I have a one page proposal, most of which is blank, where I put the scope of the work in. It has some legal mumbo jumbo at the bottom, but proably not enough. May have to go to multipage contract format to cover the bases. e/m.
 
romexking said:
First, in all of your Proposals or Contacts, have a clause regarding reasonable attorney's fees if they default (don't pay). If you do not have this clause, you will NOT be able to sue for attorney's fees. I also have a clause that by sending a contract in the amount of my Proposal, they have agreed to all terms of my Proposal, whether they sign it or not.

I have a GC I am suing for $74,000, including interest, plus attorney fees, and fortunately for me, they are the only GC in 11 yrs to have actually signed my Proposal. We fully expect to win the entire amount, but collecting will be a completely different story.

Second, whether your contract is with the GC or property owner, the property owner is ultimately responsible for paying you. They may have already paid the GC for your work, but if you haven't been paid by the GC, the owner will have to pay you again. That is how it motivates the property owner to get the issue resolved.
Click to expand...
I usually have them sign it, unless I know them pretty well, or if the amount is just very small. The reasonable attorney fee is a good clause to have, I will get it in there somewhere. Thanks, e/m.
 
480sparky said:
Lien laws vary by state, but if you place a lien on property that isn't the GCs, the owner is going to call up the GC very quickly. Pressure from their side may get him to pay up.
Click to expand...
Good point, should have tried the lien option before the collection agency deal. Well, maybe next time, as I am sure there will be a next time, unfortunately...
e/m.
 
romexking said:
I also have a clause that by sending a contract in the amount of my Proposal, they have agreed to all terms of my Proposal, whether they sign it or not.
Click to expand...
Wow. You could make a living just sending contracts to people.
 
Romexking probably meant a check in the amount of the contract. When someone doesn't pay your strongest tool in collection is your contract. To collect from a GC your strongest tool is to notify the homeowner. There are varying state rules. In IL a notice that you worked there within 60 days of start, and a Notice of Intent to Lien within 90 days. Sometimes a non-legal letter will get their heart pumping enough that they'll get the GC to pay. Tell them you completed the contract, the GC hasn't paid, you have no choice but to get your lawyer involved and lien the property. You don't really want to lien the property, you want the money.

Dave
 
i had a buddy go into the mechanical contracting business and he got this idea to incorporate a list of items on the backside of his proposals. this is how he did it. first he sat down and made a list of conditions he expected to have on a job. had a small number of proposals printed listing these items within the conditions of the proposal. then when he came across something that was not his fault and cost him money he would write it on a list to add to his original list next time he needed proposals printed. when he showed it to me there were about twenty listed conditions --- and as i read them i could remember running into these same issues!!! examples: "secure" on site parking, job cleanliness, job readiness, jobsite security, etc.. we worked on many jobs together and believe me -- the a/c guys had their way when it came to the general contractor. don't know if was legal, but it worked....
 
Tiger Electrical said:
Romexking probably meant a check in the amount of the contract. When someone doesn't pay your strongest tool in collection is your contract. To collect from a GC your strongest tool is to notify the homeowner. There are varying state rules. In IL a notice that you worked there within 60 days of start, and a Notice of Intent to Lien within 90 days. Sometimes a non-legal letter will get their heart pumping enough that they'll get the GC to pay. Tell them you completed the contract, the GC hasn't paid, you have no choice but to get your lawyer involved and lien the property. You don't really want to lien the property, you want the money.

Dave
Click to expand...
Excellent advice. I waited too long and then went straight to the collection agency. Next time will get in touch with the home owner first. Thanks again. e/m.
 
charlie tuna said:
i had a buddy go into the mechanical contracting business and he got this idea to incorporate a list of items on the backside of his proposals. this is how he did it. first he sat down and made a list of conditions he expected to have on a job. had a small number of proposals printed listing these items within the conditions of the proposal. then when he came across something that was not his fault and cost him money he would write it on a list to add to his original list next time he needed proposals printed. when he showed it to me there were about twenty listed conditions --- and as i read them i could remember running into these same issues!!! examples: "secure" on site parking, job cleanliness, job readiness, jobsite security, etc.. we worked on many jobs together and believe me -- the a/c guys had their way when it came to the general contractor. don't know if was legal, but it worked....
Click to expand...
Excellent advice. We have all been burnt by all of those things at one point or another. Thanks, e/m.
 
What I meant was that since most GCs do not sign our contract, but instead send one for us to sign, I have a clause that if they send a contract for us to sign based on our Proposal cost, then they in effect have agreed to all terms in our Proposal.

I also forgot to mention that in order to collect interest on past due amounts, you MUST have it written in your contract.
 
Sorry for the length, but here is that Proposal:



Proposal



November 25, 2007


Submitted To:




Job:



Scope of Work:
Furnish all labor, material lights, panels, permits, and inspections as needed for the following:

a.
b.
c.
d.
as shown on plans dated ________________ pages ___________________________________

Price:

Payment Schedule:
Net 30 days from date of invoice.
Payments not received within 30 days of invoice due date shall be considered past due and will accrue additional interest charges of 1.5% per month of the unpaid balance until paid in full. No work shall be performed (including warranty) if any amount is past due (including change orders and retainage). In addition, no release of lien shall be signed unless all payments are paid in full.

Acceptance of Proposal:
This proposal may be withdrawn if not accepted within 15 days from the date of submission. When signed by both parties, this instrument, including the conditions on the following pages, constitutes a legal and binding contract.

YOUR COMPANY NAME.: Date:

Contractor: Date:








Change Orders:
Any deviation or alteration from this proposal will be executed only upon written orders of same, and will become an extra charge. Said charges shall in no way affect or make void this proposal. Charges for extras will be based on a labor rate one hundred ten ($110) dollars per hour. This includes labor, labor benefits, supervision, overhead, warranty, and profit. Materials shall be charged at contractor’s list price. YOUR COMPANY NAME must receive written authorization by any of the individuals listed below prior to commencement of the work. This rate shall be applied for changes that are completed between normal working hours.

Individuals with authorization to sign written change orders shall be:

Name: Title:

Name: Title:


Electrical Contractor Shall Not Be Liable:
For failure to perform if prevented by strikes, or other labor disputes, accidents, acts of God, government or municipal regulation or interference, shortages of labor or materials, delays in transportation, non-availability of the same from manufacturer or supplier, or other causes beyond the Integrated Electrical Contractors, Inc.’s control.

Exclusions:
This proposal does not include: concrete, patching, painting, asphalt cutting, asphalt patching, sealing of roof penetrations, fire stopping, starters, fire alarm, sound, POS, satellite, thermostats, duct detectors, security, lamps. All waste created by YOUR COMPANY NAME will be removed to a specific area or dumpster on site provided by owner.

Materials and Equipment:
All materials and equipment shall be as warranted by the manufacturer and will be installed in a manner consistent with standard practices at this time. It is agreed that all material required according to this proposal will remain the property of YOUR COMPANY NAME until paid in full. It is understood that YOUR COMPANY NAME shall have the authorization to enter upon owner/contractor property for the purpose of repossessing material and equipment whether or not installed with liability to owner/contractor for trespass or any other reason.

National and Local Codes:
Electrical installation shall meet the National Electrical Code. Errors in design by the architect and/or engineer are not the responsibility of YOUR COMPANY NAME Any additional outlets, wiring, lighting fixtures, equipment, etc not indicated on the blueprints and specifications that are required by other (i.e. Inspectors) shall not be part of this proposal. If site lighting is part of this proposal, the Owner shall be responsible for compliance with any local or county codes regarding down lighting.

Owner/Contractor Defaults:
Owner/Contractor will be in default if: (1) any payment called for under this proposal and all authorized change orders becomes past due; (2) any written agreement made by the Owner/Contractor is not promptly performed; (3) any conditions warranted by the Owner/Contractor prove to be untrue; (4) failure of Owner/Contractor to comply with any of the conditions of this proposal. YOUR COMPANY NAME”s remedies in the event of Owner/Contractor defaults, YOUR COMPANY NAME may do any or all of the following: (1) Suspend the work and remove its materials/equipment from the premises; (2) remove any material/equipment supplied by YOUR COMPANY NAME, whether or not it has been installed and whether or not it has been placed in operation. In this regard, Owner/Contractor agrees that YOUR COMPANY NAME may enter upon Owner/Contractor property for the purpose of repossessing such equipment without liability to Owner/Contractor for trespass or any other reason; (3) retain all money paid hereunder regardless of the stage of completion of the work and bring any appropriate action in court to enforce its rights. The Owner/Contractor agrees to pay all costs and expenses, attorney’s fees, court costs, collection fees incurred by YOUR COMPANY NAME in enforcing its rights under this proposal.

Performance:
Contractor agrees that where a written construction schedule is provided with the signing of this proposal and YOUR COMPANY NAME fails to comply with said schedule, YOUR COMPANY NAME shall pay all overtime costs necessary to complete construction in a timely manner. If a written schedule is not provided, YOUR COMPANY NAME shall not pay for any overtime to complete the project, and any overtime required shall be considered an extra and authorization shall be required according to Change Orders referred to above. Reasonable time shall be given to YOUR COMPANY NAME to complete each phase of the electrical job.

Warranty:
(1) Warranties apply exclusively to the electrical installation of the material, lighting fixtures, equipment, and other items supplied by YOUR COMPANY NAME., (2) Warranty does not apply to material, lighting fixtures, equipment and other items supplied by others. (3) Warranty does not apply to extensions or additions to the original installation if made by others. (4) Warranty shall commence from the date of final electrical inspection date for a maximum period of one (1) year. Warranty does not apply if any payments to this proposal become past due including change orders.

Inclusion:
If the General Contractor issues a subcontract agreement, this proposal shall become part of that agreement. If a separate subcontractor agreement is issued, this proposal is not required to be signed, it shall become part of the agreement and all terms in this proposal shall be binding on all parties.






I can email it to you in .doc format if you would like, just pm me.
 
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