Trouble getting paid in full

[p51]

I have been having trouble collecting my money in full recently,in the last 3-4 months I have had 3 jobs that I had given prices on up front that when I went to collect that the customer informed me that they were going to pay me less than the agreed upon price and I could accept the reduced amount or take them to court,file a lien,etc.etc. I took the hit on the 2 smaller jobs (under $1000.00) that were with homeowners,but fought the GC on the larger job ($12800.00) but ended up taking a $2800.00 hit on that one also.These people all semed to have planned this ,I sure hope this is not a sign of things to come!! I have been in buisness 23 yrs. and up till now only had this happen 2-3 times.

 

[tonyou812]

that type of crap would require me to go have a talk with "Peter Big Nose" and "Jimmy the mouse". they would get my money they might keep some but its all about principal.

 

[quogueelectric]

I have been having trouble collecting my money in full recently,in the last 3-4 months I have had 3 jobs that I had given prices on up front that when I went to collect that the customer informed me that they were going to pay me less than the agreed upon price and I could accept the reduced amount or take them to court,file a lien,etc.etc. I took the hit on the 2 smaller jobs (under $1000.00) that were with homeowners,but fought the GC on the larger job ($12800.00) but ended up taking a $2800.00 hit on that one also.These people all semed to have planned this ,I sure hope this is not a sign of things to come!! I have been in buisness 23 yrs. and up till now only had this happen 2-3 times.

Certain types of people want you to work for free for them. You need to be able to weed these customers out. I am not saying that it is easy and try not to let them get too far behind as the further behind the farther the chance of collection. In Ny there are a lot of new aggressive bill collectors who use lower courts to garnish/lein and are very effective at getting paid.

 

[wireguru]

why not put a lien on the houses? you will get paid eventually unless they foreclose. sue in small claims, then get a writ of attachment and take your money out of their bank account. if $1,000 is no big deal, then can i have $1,000 too? :smile:

 

[brantmacga]

i've had that happen twice; both times it was an emergency situation for them after hours and they had the nerve to try this. i offered to take the lower payment, but told them i would have to "undo" some of the correction work to meet the lower price. undo means of course stripping out whatever i did to fix it. they paid promptly. while tony may have been joking about "jimmy the mouse", it is a good idea to know a guy who knows how to collect. i've only had to pull that card once. you should also have a contract that outlines the price, payment terms, etc. . .that is signed by both parties. always; i learned the hard way.


i've also got over 10 accounts over 60 days right now, some who haven't even attempted to pay their balance. it seems to be the new trend.

 

[brantmacga]

why not put a lien on the houses? you will get paid eventually unless they foreclose. sue in small claims, then get a writ of attachment and take your money out of their bank account. if $1,000 is no big deal, then can i have $1,000 too? :smile:

i read somewhere that a lien in florida forces a foreclosure, and you get what's left after the primary leinholder is paid (if any). anyone know if there's any truth to that?

 

[quogueelectric]

At the risk of repeating myself make sure you dont get a smooth talking snake to get you to begin work without 1/3 down at least your material is paid for. One third at rough and one third at final. I am not saying it is perfect but there is no worse feeling than you supplied all the material for someone who stiffed you on a few thousand dollar job with no contract. The smooth talking snake will make you feel there is no need for that.

 

[Greg Swartz]

For my smaller jobs, I take 40% when we start, 40% at rough in inspection, and 20% at Final inspection... when the permit closes.

I have one account that is just over 11 months... they are smart about this. My collections agency has given up on them...

Usually, I have 1 collections agency, and my lawyer.

The lawyer writes a letter, and no problem, they pay...

But, my neighbor, who owns a gutter company... he charges 30% in fees if you are late. And if you are... a big black guy comes to your door (6'7 350 lbs) dressed in a suit with a rose corsage and speaks to you in a deep voice about making your payments. He even takes checks...

It has never failed yet!
I just thought... I need to hire him!

Anyway, I show the contract. If they pay less, then when we are on the way out, a few things will stop working... I will make sure.

 

[bjp_ne_elec]

I have been having trouble collecting my money in full recently,in the last 3-4 months I have had 3 jobs that I had given prices on up front that when I went to collect that the customer informed me that they were going to pay me less than the agreed upon price and I could accept the reduced amount or take them to court,file a lien,etc.etc. I took the hit on the 2 smaller jobs (under $1000.00) that were with homeowners,but fought the GC on the larger job ($12800.00) but ended up taking a $2800.00 hit on that one also.These people all seemed to have planned this ,I sure hope this is not a sign of things to come!! I have been in business 23 yrs. and up till now only had this happen 2-3 times.

Not sure if you can slap a mechanics lien, but if you can in your locale, do it. Call their bluff!. Also turn them in to a collection agency. What these yo-yos aren't considering is this will impact their credit. Also, with a mechanic's lien, their property can't be sold. If they agree on a price and then back pedal when it comes time to pay, I think I agree, that they might have already had this in the plan. Again, call their bluff. Unless they're really the "bottom of the barrel scum" (they're scum no matter how you shake it if they don't follow the contract) they might not pay - but at least you've done the right thing.

In NH you have to specify upfront that their will be a mechanic's lien for non-payment, so again make sure you check the local laws for how a mechanic's lien needs to be initiated.

And what the GC did - that's over 25% - that's got to be your total profit. Again, slap a lien on the property. The owners will help you "convince" the GC to make good. Better alternative than calling Peter Big Nose, as suggested earlier.

Good luck!

 

[kbsparky]

Did you "1099" them for the balance forsaken?

CC companies routinely do this.

 

[jrannis]

I have been having trouble collecting my money in full recently,in the last 3-4 months I have had 3 jobs that I had given prices on up front that when I went to collect that the customer informed me that they were going to pay me less than the agreed upon price and I could accept the reduced amount or take them to court,file a lien,etc.etc. I took the hit on the 2 smaller jobs (under $1000.00) that were with homeowners,but fought the GC on the larger job ($12800.00) but ended up taking a $2800.00 hit on that one also.These people all semed to have planned this ,I sure hope this is not a sign of things to come!! I have been in buisness 23 yrs. and up till now only had this happen 2-3 times.

You have more rights than you might realize. I know you filed a NOC when you pulled the permit. That helps some.
If you have been off of the job for more than 45 days, its going to be tough.
Call a company like Florida Notice. They will help you with your claim and guide you through the process.
They are just off Miramar Parkway. They do this for a living and the fees are very reasonable.
Also, make sure you setup a job account for any project that is more than a couple of grand. The supply house can then collect around you by filing a lien and making a claim. I have found it very useful for people that want to pay slow.

 

[ITO]

Why is this an "either/or" proposition?

1) Take what they have offered as a partial payment.
2) File a lien for the rest.
3) Maybe turn it over to a bill collector or take them to court too.

 

[Minuteman]

Did you "1099" them for the balance forsaken?

CC companies routinely do this.

This can be very effective. Had a guy get ALL KINDS OF upset over getting a 1009 from me for work he did not pay full price for. "Hey, you don't get somethin' for nothin'. You should have paid me."

 

[Fulthrotl]

I have been having trouble collecting my money in full recently,in the last 3-4 months I have had 3 jobs that I had given prices on up front that when I went to collect that the customer informed me that they were going to pay me less than the agreed upon price and I could accept the reduced amount or take them to court,file a lien,etc.etc. I took the hit on the 2 smaller jobs (under $1000.00) that were with homeowners,but fought the GC on the larger job ($12800.00) but ended up taking a $2800.00 hit on that one also.These people all semed to have planned this ,I sure hope this is not a sign of things to come!! I have been in buisness 23 yrs. and up till now only had this happen 2-3 times.

i've learned all i needed to know about deadbeats by working for
machine shop owners....

i've only had a couple of people end up being uncollectable. one of them
was, you guessed it, an areospace machine shop. i had half a dozen open
work orders with him, and partial completion on all of them. partial billings
on all of them... all going well, and i stop by to pick up a check for $7k,
and before he gives me the money, he wants to renegotiate all of his
contracts, disadvantageous in the extreme to me.

i'd kept a spreadsheet on this guy, and all his different projects, so i
knew daily how much he was into me for.... and it had been working
down from $20k to the current point, which was less than a thousand,
over the course of six months, and i knew i was being positioned for
the kill....:smile: and i knew it was time to wrap it up.. this was as close
as i was ever going to get to even. i had watched other people deal with
this guy, and they had all gotten burned for money, and left.

now, two of the projects had open permits on them.... i had come on
the job to find someone else doing additional work there, under my
permit. waiter, check please. time to go.

my customer was under the impression that once a permit had been
issued under my license, HE owned the permit, irregardless of if i was
still there or not.

i went into the building department, to pull my permits, and spoke with
the inspector for the job, explaining why i was done. the inspector asked
what percentage of the work was complete, and i said 10%. he blinked
hard, and said this is what happens to everyone who does work there.

my tools were off the job, and i pulled both permits, citing nonpayment
as the reason. the inspector went over the next morning, and red tagged
the guy's building, giving him 7 days to complete work before utility was
notified to disconnect service.

the guy dashed out and got a chrome plated, ring tailed doozy to do the
work, and i heard thru the grapevine, that the total cost amounted to
over $250k, and ended up in court, for nonpayment.

 

[growler]

These people all semed to have planned this ,I sure hope this is not a sign of things to come!! I have been in buisness 23 yrs. and up till now only had this happen 2-3 times.

One thing that can happen is that when the economy get's bad a contractor is not as choosy about his customers. The same red flags that may warn you in normal times get ignored.

There was a class on this very subject a few years ago and the point of the class was that in bad economic times you need to be more carefull and not less carefull when taking jobs. In bad times it's even harder to cover a loss so you don't want to make any mistakes.

 

[satcom]

This can be very effective. Had a guy get ALL KINDS OF upset over getting a 1009 from me for work he did not pay full price for. "Hey, you don't get somethin' for nothin'. You should have paid me."

Wow, what a novel way, to beat a dead beat!

 

[GUNNING]

When they say money is no object that's cause there isn't any.

When they say money is no object that's cause there isn't any.

I used to have a collection agent. He sold it to his kids who sold it to someone in Alabama. Its messy but effective. Lots of sleepless nights and ignored paperwork before I turn it over to them because I like my customers. Generally I would get a call for payment within a couple of days after I contract it out for collection (costs about a third). Makes you think about putting draconian charges on like the credit card companies or filing legal pleadings. But putting on a 1/3 collection fee will let you break even, get some sleep and get it closed.
When it gets tough like this, I realize I can choose what work I take on, some can't. If I couldn't I would be making sure I was always ahead on the cash side and always had a definite, defined scope of work, in writing. Reduce my overhead demands where I could. Change up my lackadaisical ways into something defined with purpose. No, well go finish up Mr Smiths job, then come clean up shop. More like, go finish up Mr Smiths job and go home I will call you when I need you and clean up shop myself. While cleaning up categorize and organize and scrap out etc...

Everything comes to an end. Sometimes in a blaze of glory sometimes in a sputtering of failure, sometimes it just does. Don't get caught with your ego down around your ankles.

 

[Greg Swartz]

One thing that can happen is that when the economy get's bad a contractor is not as choosy about his customers. The same red flags that may warn you in normal times get ignored...

Funny you say that... I was going over a couple jobs from about 2 years ago. I found 2 jobs that were never completed... I looked at the permits, and they are finaled, but the homeowners never called me... they finished the work themselves...

I didn't really lose any money... I use a 40 / 40 / 20 rule... 40% when we start, 40% when rough is complete, 20% at final inspection.

All they had left to do was the trim out, and final...

Both those jobs were on the same street... 2 houses from each other...


You are right: I was new, times were hard, and I was willing to take nearly any job.

So, I learned... the hard way...

 

[electricguy61]

Why is this an "either/or" proposition?

1) Take what they have offered as a partial payment.
2) File a lien for the rest.
3) Maybe turn it over to a bill collector or take them to court too.

If the check they give you says "paid in full", most courts accept this as the end of the discussion. Your endorsing the check means you agree to this as final payment. (I'm not a lawyer, but I love watching "The People's Court").

 

[ITO]

This can be very effective. Had a guy get ALL KINDS OF upset over getting a 1009 from me for work he did not pay full price for. "Hey, you don't get somethin' for nothin'. You should have paid me."

This made laugh, yes yes this is a good thing.