Issue with Payment and CO

[tyha]

Here is the situation:
We have a project that is going on 60 days past due of close to $140,000. The general contractor will not give us any definite answers as to when we are going to see some money. We have pulled off the job because the supply has closed the account. We have a long relationship with both the GC and the supply house and the BM at the supply house said they were going to keep it open because we run about a million a year through them but I said to close it so we could put some pressure on the GC. Now there is a $22,000 change order on the table that does not have approval as yet but it was an issue where the utility moved the transformer and we have to extend 16 3" conduits with 4 350 mcm in each. So there is no going around it, it has to be done. I stopped by the project this morning because we still have a trailer and material there and I see that the GC has purchased all the extra conduit and the trough that was added and set it next to the location of the transformer. When I asked the super what was going on he said they needed to get the trough mounted in order to call the POCO and get the service installed. What should I do.

 

[rlane00]

Tough situation. The GC obviously has the money (or credit) to buy some of the materials so if you just wanted to deal with the change order you might tell him to buy all the materials and prepay you at your normal rate for the work to install. Obviously you lose the opportunity for potential mark-up on the materials, but you also avoid the possibility of not getting paid.

It doesn't solve the bigger issue of the past due $140,000, but it keeps you on the job (hopefully that is a good thing) without going further in the hole.

If the GC does not agree then I would seriously investigate your options for getting the $140,000 you are owed.

 

[tyha]

yeah, I see your point becuase when we sent out the co we attached a schedule of values that shows everything. I am just against using these arrogant bas***** material. I mean if they have the money to go out and buy material to save money then why cant I get paid. I do know for a fact that they are in court because they got stiffed a 6 months ago with an owner owing them about $600,000 and that is where all their money issues are stemming from.

 

[ITO]

File a lien on the job ASAP.

 

[petersonra]

your options seem very limited.

i think you have to work it out with the GC somehow, or he will just find someone else to finish and then it becomes an even bigger mess.

maybe he can afford to pay you to make the changes, and work out the rest of it later. at least you won't be any worse off that way.

i don't think at this point it matters much if you get any markup on the material. just get the thing done and move on or you may end up being out the $140,000 completely.

 

[petersonra]

File a lien on the job ASAP.

hows does this help him get paid anytime soon? it might just push the gc over. not a good way to collect.

 

[satcom]

Next time run a credit history on the GC's befor you enter any contract, and make sure you have progress payments that start early in the job not 60 days out, for now a good contract attorney for advice might be a good idea.

 

[growler]

File a lien on the job ASAP.

I agree, if the GC doesn't wish to play ball then go directly to the source of the money.

The GC may have already collected for progress made on this job by the electrical sub. I believe that you should always get in touch with the people that finance the job ( owners). When the owners find out that there is a lien on their property for work they have paid for they will not be happy campers.

 

[cschmid]

This is tough situation..But all you are out now is labor expenses as he (the GC) bought the materials..He will get someone else in to finish the job and you will be bad mouthed..I would file a lien and provide the labor if it is not going to bankrupt you..But I would have our lawyer on the job already this is not chump change..I would also be talking with my banker to see when they are going to pull the plug on you..Let us know how you come out..

 

[petersonra]

I agree, if the GC doesn't wish to play ball then go directly to the source of the money.

The GC may have already collected for progress made on this job by the electrical sub. I believe that you should always get in touch with the people that finance the job ( owners). When the owners find out that there is a lien on their property for work they have paid for they will not be happy campers.

I think the answer is does it help you get paid or not?

If it helps you get paid, maybe you go to the owner and point out the problem. A lien does not necessarily get you anything.

I'd still try to work out something with the GC first, maybe the threat of going to the owner is all it will take.

OTOH, you can't get blood out of a turnip and if there is no blood in this turnip maybe all you can do is file and hope for the best, while cutting your losses.

I wonder why the GC and/or the owner did not request lien waivers? That seems pretty common.

 

[mdshunk]

The GC's doing what he's got to do (finishing the work), and now it's up to you to do what you've got to do (start lein proceedings).

 

[growler]

I wonder why the GC and/or the owner did not request lien waivers? That seems pretty common.

They will want lien waivers for sure but they only get that after they pay.

A lien waiver is to keep a contractor from putting a lien on the property even after they have been paid in full. It's good practice to get one from each sub, supply house and the GC.

At present both tyha and the electrical supply house can put a lien on the property.

 

[emahler]

no offense to anyone here, but i'd listen to ito....he probably has more experience than any of us (except maybe satcom ).....the gc already screwed up the relationship by not keeping you in the loop...file the lien, screw up the financing and get paid...good luck....

 

[Lxnxjxhx]

Set a date by which, if

Set a date by which, if

you don't receive payment, you will absolutely

notify the States's attorney,
hire an attorney,
put a lien on the guy,
report him to your local Consumer's Advocate ('cause he might also be stiffing consumers).

Otherwise you get "teased" into waiting forever for payment.

Maybe I should feel sorry for the guy, but his problems cannot become your problems.
This is business.

 

[teco]

Who has the electrical permit on the job the G.C. or you? I my state in most towns you can't have two permits out for the same job.

 

[ITO]

hows does this help him get paid anytime soon? it might just push the gc over. not a good way to collect.

I think you misread the original post, the getting paid anytime soon option as has long since passed by. If his lien rights run out, he may not get paid at all, in fact it may even be too late now...hence the "ASAP".

 

[Tiger Electrical]

no offense to anyone here, but i'd listen to ito....he probably has more experience than any of us (except maybe satcom ).....the gc already screwed up the relationship by not keeping you in the loop...file the lien, screw up the financing and get paid...good luck....

Maybe before giving advice on this a little honesty would help, like..."I've worked for a GC who I invoiced and went past 30 days."

Although I wasn't always paid when I wanted to be paid, I enjoyed when the GC ran the project through a title company. I always knew I'd be paid. Here in IL as a sub I have 60 days from start to notify the owner of my identity and 90 days max. to Notice of Intent to Lien. The amount of $$$ is more than enough to get better advice than we'll give, and the GC blew the relationship on this. Get your money.

Dave

 

[romexking]

Notify the owner of your Intent to File Lien. More than likely they have a construction loan that will convert to a regular loan for the property. You need to have your Lien in place before the loan converts, otherwise you may have to wait a long time for your money.

 

[SmithBuilt]

I would try to work things out and help the GC get this job done if possible and get as much money as possible before filing the lien. Don't start any more jobs with him.

After you file you can forget getting any, as the GC will no longer pay you even if he has a little money, he will use that to continue the job. If there is no money and he must file bankruptcy then only the creditors that have secured loans will get anything. That is if there is any money left, the attorneys will get theirs, chances are good the money is gone.


I've been there do that. All of my fellow sub contractors filed liens, I did not even after the time limit had past. He paid me something up until he had to file bankruptcy, I was almost paid in full, but no one else was. I understand not all GC's will do that and your situation may be different. But filling a lien may force the GC into bankruptcy especially if all the subs do it, then your stuck with the owner who has paid the GC your money but it's gone. Nobody wins in these situations. Well maybe lawyers.

You may stand a chance if the owner is in good shape, but in my case they went bankrupt also.

 

[growler]

But filling a lien may force the GC into bankruptcy especially if all the subs do it, then your stuck with the owner who has paid the GC your money but it's gone.

How does fileing a lien against a property force a GC into bankrupty? He is no better or worse off than before. Not one nickel comes out of his pocket at this time.

A lien is nothing more than a claim to a portion of a property's value because you have not been paid for services or materials that are now part of the value of that property.

If you don't file a lien then you may give up your right to stake a claim to part of the value of said property.

Why do you think everyone wants a lien waiver? It's to show that there are no outstanding claims against a property for materials and services.