What actions can you take when you do a job for a builder and he does not pay you. There was no contract, just a hand shake ( I know). I sent him Invioces, left messages, nothing. I have learned a lesson.

Talk with a lawyer and discuss a Workman's Lien on the property. If you know the owner, send them a letter of Intent to Lien.

Good Luck.

Dave

Lien, before settlement.........

He can't sell it with a lien on it.

quote"also a credit check on any GC will help to avoid problems"

LK, have you actually ever been able to get a GC to submit himself to filling out a credit report application for you? You must meet up with much nicer contacts than I ever have.

Had similar situation .
Builder is not always the man with the money .
Find the property owner or if he has a financial backer . Be nice to them but explain that builder refused to pay and you would like to avoid taking a lien . They may talk to the builder and get better results than you will .
It could be that the financier is unaware of builders practices . If this works you get your money without law fees .
1. Don't eat yellow snow
2. don't trust builders

Send M&M notice to GC and to homeowner.

Send it certified, return receipt requested. There's some specific wording you need to have in it but when the homeowner has to go to the Post Office to sign for a letter, he'll know you mean business.

If the homeowner knows you've done work in his house you should be good to lien it. There are very specific timing rules for notices so be carefull on not letting the timeline slide. GC's go to school to learn how to delay payments till it's too late or u get too busy to spend time to collect.

In my state, you need to file the intent to lean, before you start the job, advance notice to consumer that you intend to place a lean on the property, it is like this in many other states, so check you state laws.

"LK, have you actually ever been able to get a GC to submit himself to filling out a credit report"

We have a credit agent, do the credit check, we let the GC know up front, that we will check his credit, if he refuse, then we just don't take the job.



[This message has been edited by LK (edited 09-20-2006).]

Oral agreements are contracts...

If you have a contractor's license...

And if you performed...

You can legally claim.

Unsatisfied judgements are grounds for the GC to lose his license.

Unsatisfied judgements normally stand as claims against the real property, typically BEFORE all other debts as a 'mechanics lien'.

It's this preference that kills bankers interest in accepting a mortgagee position.

If the property is being financed... lien claims are a killer. ALL boilerplate from ANY lender REQUIRES that the borrower keep the property clear of all liens.

As general advice: never get so entangled with any specific contract that the cash flow ... or lack of... will bring you down.

Counting on EVERY customer/contractor to pay on time per the deal is a sure path to insolvency.

Any time the other party realizes that they have you over a cash flow barrel: you'll suffer.

We have found just a threat of a lien usually does the trick and when that fails, the actual lien really does the trick.

Another thing you could do is track him down and talk to him face to face. Take a witness (like your wife or a small man - so he won't feel intimidated.) Do not threaten him.

Hand him an invoice. He may say that he hasn't been paid or that he has had some other issue. If he cannot pay right now, get him to sign the invoice (acknowledging recept}. Now you have a contract.

Here's my question. What if the builder has already sold the home? That's the situation I'm in. They built it, we wired it, they never paid the final draw. Can I still file a lien on the property?

Contracts,contracts, contracts, these are the most bitter lessons i've had to learn and it'll make an old man out of you. In Ark. you must send a (specifically worded) notice of intent to lien within 75 days of the money being owed, then within another 45 days file the lien, but you then have to file suit in order to enforce the lien. You need to get an attorney to send these notices, but keep copies. when you do this stuff, you gotta be letter perfect with the legal description of the property. Once your situation is in the hands of an attorney, you loose anyway... but get after this, send the notice of intent to lien to the owner because it clouds the title and they don't want that. Kick their A$%#s.

Maybe not ripped off, but slow pay. I finally received $2,000.00 off this deadbeat. I went to his house 3 times and repeatedly called him. He still owes me $1,000.00, which he says I will receive in a week, we will see.

His payment is proof of contract, in the eyes of the court.

Slow pay beats no pay.

In Florida you are required to file a notice to owner before you start. No Notice, you can't file a lien. If you had filed a notice, he would not have been able to sell the house without paying you.

I know this topic is really old but I wanted to add another suggestion. I have had clients in the past that have “sweet talked” me just long enough for our lien rights to pass, then tell me good luck on getting paid. After getting screwed enough times I stumbled across a collection agency that took on these deadbeats for me, and they have a 90% success rate, and charge 30% of the dept they collect.

What they do is not pretty, they have a private investigator and identify the key people who own the business or property and hound them relentlessly, as well as filing on their credit reports, and endless phone calls. It does not matter what kind of handshake deal you may have had they are a pack of hyenas that only get paid if you do and they don’t give up.

70% of you money is better than nothing, and losing clients like this is not really a loss.

The only GOOD advice someone on this forum should give you pertaining to LEGAL matters is "talk to a Attorney"!

People here have good intentions, but they are not lawyers. There are many myths to what we should do in this case.

TALK to a ATTORNEY! No I am not an attorney

and make sure it is one that deals with this type of thing!

[This message has been edited by ayrton (edited 03-07-2007).]

It never hurts to speak to an attorney or I should say pay to speak to one, but once you retain them the results never seem to be what you think they should be. In most cases a lean will take care of the issue and paying an attorney to show you how to do a proper lean procedure in your state is a good idea too, but 9 out of 10 times that I have hired a attorney to settle a debt, the results have been less than what I expected and the lawyers all got paid real well for it. This is why I switched to collection agencies; at least I know the results o the front end.

IMHO one of the biggest problems the US has is our “Culture of Lawyers”, we jump to sue way too quickly, and the threat being sued defines way too much of our daily lives. Once the lawyers get involved, nobody really wins but he lawyers who all get paid no matter what the results are for either party.

Just my 2 cents, it never hurts to get legal advice, but once the suing starts the results are not guaranteed and it may not work out like you think it should.

The only GOOD advise someone could give you about attorneys is: Buyer Beware.

[This message has been edited by ITO (edited 03-07-2007).]

I'm still waiting for the $1,000.00.

That is not enough to get a lawyer involved, just turn it over to a collection agency and maybe you will get some of it back.

"That is not enough to get a lawyer involved, just turn it over to a collection agency and maybe you will get some of it back."

Once a collection agency get involved, nobody really wins either, but the agency will get paid no matter what the results are for either party, same as the lawyers.

When you get a collection agency involved, a few things may happen that may actually cause you to get no payment, what some don't understand is the credit reporting effect, lets say you turn over a payment for collection, the agency will then send in a credit report on the GC, now the GC who might of had a tempoary cash flow problem, now has a credit line problem, you just componded his ability to pay, and now with the higher credit line charges, money that he may have beeen able to pay you with is gone, it's now going to pay increased intrest charges, and this is what can put a small GC out of business, so before you shoot your foot off, try talking to the GC and ask if it is cash problems, and if it is, try to work out some terms that will assure payment.

A collection agency works, it gets you paid, if the party has the money, or makes sure you never see payment, by putting the party in a position that drives them out of business.

Another thing to think about, is this someone you would like to continue business with, if they are just going thru a cash flow crisis, collection agencies should be a last resort, only after all other options have run out.


[This message has been edited by LK (edited 03-08-2007).]

I've mentioned this technique before, and will do so again. In my state, a general contractor has to demonstrate financial responsibility to the tune of at least $25,000 liquid assets at the time of his filing. He is required by law to keep this liquidity, (however about .001% will follow that rule) as long as he is in business, or they have full right to revoke or terminate the license. Once any builder whines about not having the money to pay me for my billings, I remind them of this simple fact. A mention of having to go down to the regulated industries complaint office to ensure that the laws are being followed is about all it takes to get the ball rolling. Check out your own state or local rulings.

[This message has been edited by macmikeman (edited 03-08-2007).]

Mac,

If we had that law here, there would be less then 100 GC's in the state. We just has a issue of a large builder going bankrupt in our state, my bet is he din't have 25 cents in the company, all other peoples money, now we have a dozen subs that worked for him, going out of business, and laying off workers. But guess what, the courts did, they rewarded him with a loan, so he can finish the half built homes, and line his pockets, without paying any of the subs, great country ain't it!

That makes absolutely no sense at all; the collection agency only gets paid if they collect the dept, and then you both get paid.

The original topic was posted on 08-07-2006.

Then this on 03-07-2007
Its been seven months, I don’t think they guy intends to pay anything it does not look like a “temporary cash flow problem”. I dunno maybe I am wrong here but a client that strings you along for 7 month on $1,000 invoice is not one you want anyway, and if a they are flaky enough that a collection agency might put them out of business, then you really don’t want to do any more work for them.

Just my very humble opinion but I have eaten enough small invoices (and big ones too) like this over the years and I have heard every good story you can imagine, and like someone said before, GCs go to school to learn how to stall you just past your lien rights and its down right underhanded.

Another point I would like to make is that filing a lien on a job does more to hurt a GC than any collection agency could ever hope to do. It can sour the relationship with the owner, stop the money flow, prevent them form acquiring more work, and even put a GC with cash flow problems right out of business. If you would not hesitate to file a lien notice, or even a lien, then why hesitate to turn it over for collection?

Sure lawyers, liens and collection agencies are all last resort options, but isn’t that what this topic is about?

Not trying to be adversarial, I just have a lot of energy on this topic. Just recently I got burned for 30K by a contractor out of NJ, it was on a public project and local laws and lean options would not work for me, so after 6 months of trying to get my money I finally turned it over for collection, and got paid in 9 days.

It turns out the owner of the company did not know, that I had not been paid and the guy I was dealing with was not paying lots of people for what ever reason. All it took was one collection call to the owners cell phone while he was playing golf and my check was on its way. With my resources I never would have been able to research this company, find the owners cell phone and call him, but for 20% I got it done.

Just something to think about, and yes you are correct these options are a last resorts and will guarantee that you never work for that GC again.

[This message has been edited by ITO (edited 03-08-2007).]

Macmikeman-

Good suggestion, I will look into that too.

Who doesn't have "a lot of energy" on the topic?

Apart from the minor detail that we're in business to get paid ... one can't help but feel bad when they are made a victim.

Still, one has to 'keep his eye on the ball.' We earn our living by making things- not by standing around in the courthouse!

Hurt as it must, sometimes you just have to call it "tuition" and move on. There is some risk inherent in business.

And, of course, an ounce of prevention is worth a pound of cure.

My nephew hated to resort to it,but usually just the threat of a lien did thr trick:}

Without contract?Maybe?