At what point do you walk away and figure it a loss. I have had a customer refuse to pay the last payment in a series of three total payments for a renovation. the bill is small but I was depending on it. I live in NYS and short of hiring a collection agent with a bat... how do I best go about collecting.

What about small claims court?. But that does tie up necessary time.

What is the building dept. going to do ???

Take them to small claims court...even a summons from SCC is sometimes enough for some people to pay up.

well, the remainder of the bill is 2k. I would be happy spending a day to get it back. i've already spend a little bit of time meeting with the contractor and the non-paying customer. i've set up a meeting with her(customer), contractor, and myself. She is trying to be very manipulative. we all need to sit down. after that probably small claims. i have no intention of wasting my time in any kind of court.....i'm basicly srewed. chalk it up to a learning exp

i'd go with the bat

makes you want to do all sorts of illegal things when you have a customer who is so blatantly unscrupulous.

What about a lien on the property. Won't get your money right away, but it will show up if they ever refinance, sell, or try for an equity loan. Who knows it might be better then just forgetting about it totally.

well, i've thought about a lein. isn't a small claims court first? then they help you with the lein? or go for both? I want to walk away with minimal effect. if I look like the bad guy for going after someone's buisness then it will reflect on me...right now this all reflects badly on her, i have not done anything to her...yet

i think i will take that into acount next time. it sounds like a good rule to follw regardless of wether it is the area's law or not. ask for final payment get your final inspection, wich is what gets you your co. with out it they can't continue buisness.

Just out of curiosity....

What would happen if the HO didn't care about the final Inspection?

What could the township do legally to them?

I don't know how it works in NJ, so I ask...

Lets say it was a kitchen remodel,not a use and occupancy issue...

Dnk...

[This message has been edited by Dnkldorf (edited 04-04-2006).]

that is almost what this is. no permit required for construction. so.. all I needed was a limited re-wire permit issued by the town and a inspection. not a whole lot to hold over the home owner if no payment

Thanks for that tidbit LK. I didn't realize we (you, NJI and myself) were all in NJ.


NJI, if you go the SCC route...don't forget to add INTEREST to your claim. A claim w/o expressed interest means no interest.
The way SCC would work is like this...you file a claim, about a month later you will be notified of a court date.
Before actually seeing the judge, you will see a mediator to try and resolve this w/o taking up the court's valuable time. If you can reach an agreement, the defendant will have until the close of business (or other time as agreed to by both parties) to hand over the funds.
If you cannot reach an agreement, you go before the judge. Again, the defendant will have until the close of business (or other time as agreed to by both parties) to hand over the funds.

Now, if said defendant does not pony up the dough, you have a few options on how to get your money. Some of them are:
- execution on goods and chattels
- bank levy
- execution against wages
- docketed judgement
(See: http://www.judiciary.state.nj.us/civil/forms/scpjudg.pdf)

All this is, of course, assuming you win.
You don't neccessarily have to file a lien against their property and play the waiting game until they sell, refi, etc.

What county are you in?
I may have some specifics.

Good question.

I honestly don't know, but...

I had a situation involving a real estate purchase where the seller did not live up to their obligations for obtaining a Continued Certificate of Occupancy (CCO) on one of the units (it was a multi-family dwelling).
The seller had represented that they had the CCO but did not have the permits issued to do the work.
Ultimately, I had the CCO revoked by the city and forced the sellers to put money into escrow for these repairs they claimed were done but weren't actually done at all.

Obviously, this is quite different than a construction contract...but, if the work that was done has anything to do with a CCO or even a TCO (Temporary CO), the city could revoke that CO rendering the property uninhabitable.
Which brings to:

For that, you might consider pulling your permit for the job. When the property gets sold, that *might* come up through the buyer's own due diligence or it *might* come up through the disclosure laws - like anybody really admits they finished their basement without an inspection!

Like I said, I don't know what the city could do...maybe fine the HO for having the work done w/o permits?

In my state a mechanics lein against a property can be used to take a foreclosure action against the property. If you do it right, you can file both items at the same time, but that is tricky enough that it takes a very good attorney to do it right. Then the actual forclosure can take from 2 months to 2 years or more depending on the backlog at the court. Do not go the revenge route. The justice system takes a dim view of those types of actions.

Les,

What has happened is that the courts and the AHJ have established that final inspection is deemed 'total/complete performance' under the contract law.

Which means that upon final inspection, the defenses allowed to the homeowner in court are reduced to zero.

In such cases, the court will render judgement merely upon submission of the paperwork. There'll be no trial: SUMMARY JUDGEMENT for the contractor.

BTW, all states set statutorial rates of interest on FINAL JUDGEMENTS. So regardless of the claim, once rendered into a final judgement the clock ticks and the rate is set.

These days, the rate may run about 9%. That's a lot more than the bank pays but a lot less than credit cards. After eight years your judgement will effectively double. 9% is way beyond the inflation rate and stacks up very well with a mutual fund on wall street. Think of such judgements as being part of your retirement plan. When finally paid, the judgement may end up at 5 times the starting amount. And all that time it was "secured" by real estate!

Stop walking away from open and shut cases.

I think that i am going to talk with the building code enforcement on fri, i have a meeting with the AHJ tomarrow. If all paper work has been completed maybe i have and option to reverse it. don;t know. or at least use the " final" as a job complete type of senerio.

As a one man shop (up until a week ago - I finally hired an apprentice)I've learned that the best thing to do when a customer shows ANY hestiation at paying out the contract is to get in my vehicle and immediately go to small claims court and file both a claim for final payment and put a lien on the property. I make a point of telling the customer exactly where I'm going and what I am going to do and what the repercussions of non-payment are going to be.

I won't put up with pussy-footing around with a "reneg" on the contract, and I carefully and fully explain that to the customer before any work starts. One of the things on my pre-work checklist that I always mention is the civil action that WILL result from non-payment. I make a point of it, while trying to be as polite about it as I can and explain that both the customer and I are under an obligation to uphold the terms of the contract.

I also explain to the customer (mostly home-owners) that there is an option for them if I don't uphold my end of the contract as well and that they have as much legal right to sue me as I do them if the work is not completed as we have precisely agreed to. In the last 208 jobs I haven't had a problem.

209 jobs ago was my first one.

I was paid in two days. (And yes, I did go back and look at my work contracts and did count them). I haven't had one since then.

Out of all the estimates and contracts I've taken on, I've never had anyone back out from this approach, to the point that about 90% of the folks I deal with have thanked me for my honesty and told me to carry on.

Hope that helps in the future.

I regretably had to lien a commercial building for non-payment of over $6,000. They got me to get release of lien forms from all suppliers before they'd pay me. After 2 months of the GC telling me that the checks coming I had no choice. In Texas you have a very limited time to file the lien (90 days) and after that you loss that ability. I assume they were trying to delay me to the point I could not lien the building.
The lien was filed and the property owner (not the tenant) wants to sell the building. The way they get around the lien is to 'bond around it'. This is a legal way to put the lien aside and proceed with the sale. I'm not sure what involvement I'll have with the bonding company but it can't be worse than the GC.
Liening may not be the best option and requires very specific time lines to perfect. I now have a 'canned' lien process to help me with a chart showing the required timelines.