Hello everyone. My name is Len and been in the general contracting business for about 10 years now, and have come across my first client who has decided not to pay for the final invoice issued. Money owed is roughly $22,000.00 which was a reduced rate agreed from the original 29,500.00 balance owed. Never been through the lien process but think this might be my only way to put some pressure on the clients to pay up!
The property we worked on was a revenue property for the client (flip house) and now they have overspent and want to recoup the difference through us. There was no signed contract between our company and the client because we have done work for him in the past and everything went well.
Problems stem from my original estimate which was provided by myself within an evening to give them a ballpark figure of what the demos would cost, from that point on work was done by material, a small mark up and labor man hours over the course of the renovations. At the end we went over by $15,000 or so do to extra worked request by the client and unforeseen problems.
Not sure where I should go now to help retrieve some or all of my money, but being a small general contracting business the money lost would not be great. Any advise would be appreciated.
First, I would put a construction lien on the property to prevent sale. Second, I would go to small claims and start an action, Third. I would hire a collection agency to collect the amount, which will appear on his Credit Bureau.
Also if he is a Real Estate Agent, I would report him to the board. Sometimes they don`t pay capital gains on their income, Report to government.
I would tell him what you going to do, give him a very short deadline to pay or settle, then proceed, don`t back off.
Lien Law in Ontario is pretty straight forward. Likely similar in Alberta.
I would definately put a lien on the property ASAP for the full amount plus costs.
Talk to a lawyer. The house won't sell until the lien is removed.
Datawise Solutions Inc
Bigger mistake is verbal agreement. Make sure that now all conversation will be documented between you and client. Try to communicate through e-mails.
We had problem even when we had contract but the name on a contract was spelled wrong. E-mail helped us to prove that this is the company we deal with. Lawyers just spent all our money we won from the case.
Try to hire paralegal (you will get at least some portion from the deal). Collection Agency - great idea, we use all the time all possibility to get money though them (you don't spend money for lawyer, time for applications and sitting in a huge lineups). Lien can be done only after court decision
Very sorry to hear that, we had couple time similar situations, now we are very paper orginized, but still plumbers on a job site sometimes trust customers and do more job with no signature, very hard to get payment after it's done, you even canonot remove your materials - officially all materials after installation are not your anymore and you can remove them after court only.
Start from conversation with client through e-mail, be very polite and gentle, try to explain as more details as possible to build history on a paper.
Wish you good luck, you will need it.
Sorry to hear. All the advice previously given is great.
What I would also do is to simply ask the client "where's my money". This is direct and should be followed by letting the client know your next steps. Sometimes the direct approach works in order to avoid any future problems.
Notify your customer that you are planning to put a lien on the property. Do it fast because you have only limited time from the last day you worked there. I believe it is 30 or 40 days period. May be less
It will be very difficult situation because you do not have contract signed. If you got paid cash it will be bad for you, getting paid cash for services and do not give a receipt is illegally for the government for many reasons If you did that. If you charge them with invoice and you got a payment from them it will be a lot easier to prove that you worked there And recover some or all of your money. Take an advice from your lawyer is the best thing.
I wish you all the best.
If you have photos before and after the project it will be bonus for you. Next time do not trust anyone out there. Always a detailed contract.
It's true that this is an awful and costly situation. I am sorry for your trouble.
Have you considered working out some type of payment plan with this client? It appears that since your company and the client have worked together previously that there might be enough of a relationship there to work through these difficulties without completely sacrificing the relationship.
I'm suggesting to try some 'out of the box' thinking to resolve the issue if the heart and integrity of the client is such that they are honestly trying to figure out how to pay you.
I know that the most obvious thing is to sue them, post a lien and all those things. But sometimes - although it may be rare - there is a less obvious course of action that can result in a satisfactory resolution because sometimes companies and clients do get into trouble through unforeseen circumstances.
While saying this, it is also true that there are just 'bad apples' out there, who simply don't want to pay and leave you with no recourse but legal action.
Best wishes as you navigate this difficult situation.
I find myself in the same situation where our client on the last day does not want to pay the remaining balance for tile flooring and drywall work, plus add-ons, totalling $3992.19, because the client is happy with a few spots of excess grout spread over 500 square feet of surface area. The first contractor they hired walked off the job, along with their deposit, so they turned to CRS to rescue them, because the flooring and drywall work was holding up our cabinet refacing project, quoted at $22,725. Feeling sorry for the customer, CRS agreed to replace their floor and pick up where the last contractor left off, quoting $22,000. During the installation process we uncovered major structural issue caused by the original builder, including 2 cracked joist. Again feeling sorry for the homeowner, CRS agreed to rip up the existing sub-floor and fix the structural problem at a cost of $500. Both projects, combined with repetitive client add-ons, totalled $47,958 + HST, written on 4 separate sales orders, which consumed just over 940 man hours from Jun 7 to July 22, 2016, managed by our project foreman who is a master tiler. On the final day the client refused to pay our project supervisor, claiming that the flooring work was not complete to their satisfaction. After exchanging a few emails, the client delivered a cheque to our office in the amount of $4000, only to put a stop payment on it the following day, claiming that the amount of the cheque was wrong, because she decided to cancel relocating of a post. The tiles around the post were left un-grouted, which was also used as leverage to withhold payment. After dozens of back and forth e-mails, at all hours, CRS agreed to issue a credit for relocating the post, less time spent and cost of the returned cheque. Again, the client refused to accept any responsibility, and proceeded to tell us that they were going to hire someone else to remove the grout spots, and that this expense would be deducted from amounts owing to CRS, even though the client was advised in writing that matters of this nature would be handled as a service warranty claim, once a payment settlement plan had been agreed by both parties. Since all trust has been misplaced by the client, the following settlement plan was proposed: 1. Payment in CASH, since the first cheque was returned. 2. Once the client confirmed they had the cash in hand, CRS would schedule a return trip to deal with all concerns. 3. Prior to dispatching of service, CRS would require a detailed list, including pictures to support each pending item via e-mail. 4. Each pending item and picture will be numbered, and CRS would provide a brief description how we intended to remedy each concern item. 5. Prior to our installers entering into the client's home, CRS will count the cash to ensure accuracy. Also, we will conduct a PDI inspection where each concern will be cross referenced against the pending items, to ensure nothing has been overlooked. Any products or services that have been tampered with, damaged, adjusted or removed, will need to be addressed beforehand. 6. During the delivery of service the client will be required to be present at all times to identify each item of concern one-by-one, whereby, CRS will make efforts to rectify each concern to the best of our abilities, providing it is within the scope of work agreed. No other products or services will be provided. 7. Prior to CRS leaving the clients home, CRS will expect full payment in cash payment, witnessed by all involved. While I would like to think our signed sales contacts, site-readiness guidelines and all the verbiage with the client would be enough to protect my business, and our 10 employees, I find myself helpless against crafty homeowners looking for ways not to pay their bill. This particular client has had full use of their kitchen and connecting rooms, so the victim here is CRS not the home owner. The Consumer Protection Act, and the Construction Lien Act, does not adequately deal with the problem when the scope of work is cosmetic associated to home renovations. Homeowners who cheat, steal labour, and or the abuse hardworking labours go through, know that the majority of the small businesses do not have the time, resources or money to take legal action, which make them a prime target, regardless of what has been signed, or how well they have documented or plead their case in front of a judge. Social media is full of homeowners publishing their experience, telling only their side of the story, exposing the names of the Companies in the hopes to destroy their reputation. However, it's not ok for businesses owner, like myself, to publish the names of deadbeat clients, who are being shielded by privacy laws, so that other hardworking tradespeople have fair warning about a suspected clients. How is that fair?
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