non paying contractor

Alan(OnVacationInOregon)Forbes

Larry is right on the demand letter; it's where it all starts and you have to give them a "pay by" date. If they ignore you, have your lawyer send them a letter that says you mean business.

Here in California, we can't ask for more than 10% down, but we choose the people we work for carefully. It's been a long time since we've been stiffed.

Good luck; your is not a fun place to be.

subcontractor

non paying contractor

Any suggestions on how to handle a contractor who will not fulfill his end of the agreement?

I was hired to do a portion of the job he could not do him self. we agreed on a price, signed a contract,completed the job and everyone loves the way it turned out.
Only problem is he says he can not afford to pay me the remainder of the contract.

I have only been in buisness afew years and have not had this problem before

What would you guys do?

Norm Harvey

I can think of a whole lot of shady ways to make his life miserable, but as far as legal ways,.. Id be interesting in hearing what can be done.

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Robert O'Brien

Put

a mechanics lien on the property you performed the work on.Sit back and wait for the phone to ring.

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Unknown

Tough Call,

are you out a large amount of money? Maybe try getting legal council (lawyer) if you are, hate to admit-it but I`ve had to "slap a lien" on a few. Usually I ask for "front money" now, to avoid this kind of crap! Watch GC`s, many will go bankrupt and just re-open under a different name and do this to the next guy!

Dave

Ted_9

My suggestion

Did you try working it out first? When you go to court, thats the first thing the judge is going to ask. The judge will recommend working something out first. Why pay lawyers when you can settle it yourself?

I am in a similar situation. I know how it is. I owe and am owed. It's all a part of the thing we call business.


Massachusetts

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subcontractor

We have had several conversations about it with the same rsponse. I guess I should start using registered mail so I have a paper trail of the effort to collect.
do you need a lawyer for a machanics lien?
The balance is $7000. i would hate to pay a lawyer 1/3

subcontractor

We have had several conversations about it with the same rsponse. I guess I should start using registered mail so I have a paper trail of the effort to collect.
do you need a lawyer for a machanics lien?
The balance is $7000. i would hate to pay a lawyer 1/3

Unknown

Did you try,

going directly to the HO?, hopefully this GC hasn`t been paid from them and they would pay you directly? A paper trail is a nice thing to have, but you`ll likely find it leads to nowhere.

Dave

jim lockard

Warrant

> Did you try working it out first? When you go to

> court, thats the first thing the judge is going

> to ask. The judge will recommend working

> something out first. Why pay lawyers when you

> can settle it yourself?

>

> I am in a similar

> situation. I know how it is. I owe and am owed.

> It's all a part of the thing we call

> business.

>

> Massachusetts

>

> _A

> HREF="http://www.heatinghelp.com/getListed.cfm?id=

> 373&Step=30"_To Learn More About This

> Professional, Click Here to Visit Their Ad in

> "Find A Professional"_/A_



and debt. In Virginia you can file a warrant and debt against this contractor, you go to court if the judge sees it your way he will render a judgement in your favor. With that judgement in hand you can do several things. 1. Garnish his wages even if he is self employed. 2. Lien his real estate. 3. Levy his personal property (which means the sheriff will gather it up and sell it). So find out what the rules are in your state and drag his butt to court. Best Wishes J.Lockard

Leo G_99

Collection

agency.

Leo G

gerry gill

2/3rds is better

than no thirds. pay the lawyer..you have better things to do.

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Dave_4

seek legal advice

I'm not sure what state your in , Every state is different.

I put in my contracts the interest that will be paid if I am not paid within 30 days and that the signer of the contract will pay my legal fees.

The Lawyers eyes light up when they read that.

Check with a attorney , you can go around the contractor and put a mechanics lien on the property ,but time is limited to 90 or 120 days In most cases a lien will put a mortgage in default.

Put the homeowner in default and he will be all over the contractor. The Contractor may have also signed a release of lien or waiver to receive his final payment , and if he did he is looking at a felony. That's jail time...

All it usually takes is a letter or two from your lawyer that you mean business and you will see your money, but if not.....

2/3 of it is better that nothing , and the next time the attorneys fees and interest will be in your contracts....

good luck

What you are going through right now is something we all go through at some time . Do what it takes
( legally of course ) to get your money. Learn from it and look at it as a expensive education.

30 years ago I spent Thousands of Dollars to have a lawyer teach me the meaning of one word . Exsposer...

Dave in NH

bob young

file claim

small claims court may be your best bet. waste no time . do it immediately. stay away from g.c. 's . they are poison. greedy & unscrupulous

joel_19

state?

Where are you located ?? every state is different. Dave is right put on the lien it has worked for us every time they can't sell or refinance without us getting payed. We to get interest 18% plus legal fees, go get them. Did he write any bad checks??? You can probably put a warrant out on him

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Larry Savino

Do you have a contract?

Are you registered to conduct business

Are you licensed

Have you invoiced the fellow who owes the money?

Has he disputed the amount

Now write a demand letter

Dear ?????????

On INSERT DATE we went into a contract (attached) to perform work at INSERT ADRESS for the sum of INSERT AMOUNT with the understanding you would pay us INSERT PAYMENT TERMS our portion of the contracted work was completed as agreed on INSERT DATE and to date I have only been paid INSERT AMOUNT by INSERT PAYMENT TYPE ALONG WITH CHECK NUMBER. Leaving an outstanding balance of INSERT AMOUNT

Our terms as outlined above stated INSERT TERMS AGAIN and now this bill is INSERT AMOUNT over due We would like to continue to work with your company and the INSERT HOME OWNERS NAME family on there future project,But we must first clear up this overdue amount , I personally mailed you the invoice on INSERT DATE and the followed up with you on INSERT DATE with a phone call ( or several phone calls or meetings whatever you did) and it was agreed job was completed as specified in the contract and you nor the home owner voiced any concerns of the work we completed.

Our company has a very aggressive procedure we follow for theft of services and this is the first step we take resolve this matter before taking legal action

Please consider this our demand letter requesting to be paid in full for the work we had completed on this project within 10 date of this letter.

Sincerely
INSERT YOUR NAME


CC HOMEOWNER


Now before filling in the dates on when the job was completed contact speedyleins this is the company we use and they will tell you how many days you have to file a mechanic lien. they charge us about 200.00 to file a mechanic lien then about 180.00 to remove it.Just make sure you have all your ducks in a row. We send out one regestered receipt letter (they never sign for it)and 3 first class letter out one day after the nextand one letter to my buisness adress. for sure gaurennteed they will get the first class letters I send out 3 so if they ever say they never were notified I can explain that with the law of averages with the us mail its impossible they would not get it. I send it to myself to also show they dont get lost in the mail.

I used to send them out next day postal so they would have to sign for it (used to write warrenty information enclosed on the envolope ) but it gets exspencive at 14.00 a pop

Most of the time we get paid with inn the 10 days or the home owner contacts us to get involved if its a dead beat homeowner they normally tell us the problem is the builders problem not his and I should sue the builder but leave him out of it.

If I am not paid I lean the property NO QUESTIONS ASKED

Once the lien is filed i normally get paid or written payment arrangement are made right away. So far I am unpaid on one job with a lien on a home and the lien is actually expiring soon ,to renew the lien gets real expensive.

Although you can file liens yourself I never did until I started to use easy lien.

I used to go to court to try and sue but it was a waste of time as we would get a judgement and still have no way to collect unless we foreclosed on the home witch is real expensive also.

We also tried a collection agency but they really did not recover much, they annoyed the piss out of the contractor but I still did not get paid.

So far the liens get the most action.

About a year ago my partner tighten up our builders collection to the point we now have them fill out a credit aplication with all the buisness names and owners along with a personal gaurentee they will pay, We missed out on some jobs as they didnt want to fill out the info, but no big loss as my open recivables in contractor work are way down over the other years. Nice to have work but now i only want to work for paying customers

Best of luck

Techman

Broken(legs) promises

What state? Did the GC sign a contract?New construction?What type of work?Many states make the GC give a signed document to the HO stating that ALL sub's were PAID IN FULL.Liens vary but they are very effective if it affects the HO directly.Some liens must be renewed annualy.Removing part or all of your stuff from the jobsite is a possibility if the GC is not going to pay .Or lawyers !Let us know more details! Good luck!

Mad Dog_2

Yes, and make sure you send an official letter to the Homeowner

who will not be pleased and will probably get your money from the contractor. Just curious, what was your payment breakdown? For large jobs, we get 50% at signing, 40% when roughing is 100% (and BEFORE the inspection), and 10% to button things up. On small 1-3 day jobs, its 50% down 50% when complete. These numbers keep our cash flow going, and never leaves us hanging. Anyone who gives you trouble with deposits, will usually hang you up later. Keep us posted. Mad Dog

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Mad Dog_2

I'm with Bob NYC Contractors are vermin

They are all the same, some just worse than others, but eventually they all will pull this nonsense. And, after working well together for several years, they will uncermoniuosly dump you when they find a new sub who can do it cheaper - even if quality is not even close. We swore off contractors about 4 years ago and have not looked back. Mad Dog

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Tim P._2

Mechanic's Liens et al

OP states that he has a contract. Why not enforce the contract?

Contacting HO is also a good idea, just to see where he/she stands.

If HO pays contractor in full, contractor does not pay you.. You file mech lien against HO's property? I guess it's easier than enforcing the contract?

I would say do a little research and see if contractor has been paid in full. If not, HO should withold further payments to contractor until you are paid.

HO paying you direct is great, except HO has paid you $7k and is not automagically released from paying contractor that $7k.

Basically, you make your problem the HO problem because you don't want to spend money to enforce your signed contract (as stated in OP).

Have I been in this exact situation very recently?

Just a different point of view...

Tim

subcontractor

Guys thanks for all the input

It was in mass.

I was hired by another subcontractor who did the hydronics and I did the sheet metal work.

My contract is with the other sub, and his was with the GC.

I did not inform the GC because this guy get almost all of his work from him, and I was thinking if he had cash flow he would pay.

I think if the GC knew he probably would not hire the other sub again. I think this should be my next step.

bob young

act now.

you better start moving quickly. you are low man on totem pole , the g.c. doesn't even know you exist.

David Tetreau

Non-pay

If you finally realize you will not get your money, write a letter to your contractor forgiving him his debt . . . and send a copy to the IRS. He will be liable for the taxes on the full amount as if it were earned income.

You will be able to claim a debt loss on your business taxes.

;-)

Techman

Claiming losses

You can only claim (IRS)your cost on material and your cost of labor.You charge $100.00 per hour but pay your tech$35.00,you can only claim the actual out of pocket expense,and you also have to prove that you TRIED legal ways to get paid! Your sub that hired you is the one you must collect from.If the GC hired the sub to do the ductwork and the hydronics and the sub subed you then the GC is off the hook.

Mitch_6

Don't matter if you

get a contract signed in blood. I have worked for G.C.'s with solid contracts and deposit checks. As I finished the job the check came back bad. Took the "con"tractor to court paid to have the sheriff pick him up and got zip.

Others I work with verbally or just e mail quotes for many years no problem

If someone is scum they will screw you no mater what.

The IRS deduction is only for your expense so it is automatically taken into account in your book keeping since you simply do not have revenue to offset it.

Welcome to sub contracting.

Mitch S.

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Plumdog_2

Something that has worked for me

is to find out the source of funding for the job, ie the bank or lending institution; and give them a call. They really don't like encumbrances (liens) and they don't trust General Contractors too much. And for good reason.

Brad White_169

Sub-Sub-Contractor

As I understand it, in MA at least and as far as Chapter 149 goes (public bidding and filed sub-bid laws and more specifically to challenges), a sub-contractor has standing to sue to challenge contract awards but a sub-subcontractor (third tier down) has no standing.

I am not a lawyer but have to wonder if in principle this removes your right to pursue a mechanics' lien.

May not be applicable to the basic issue of getting paid, I just found this interesting.

The behavior of some in business I find simply appalling. Makes one appreciate karma, does it not?

Good Luck

Brad

p.s. I really like the IRS tip on forgiving the debt to the extent that you can and having the GC take it as income. 1099's all around!