I've been stiffed on a $1200 dollar bill by a homeowner for work on an addition to his home.I didn't have a detailed written contract,just a written estimate and a gentlemens handshake to seal the deal.He says I'll never see the money...so I brought him to small claims court...which I have been to 4 times already and the case hasn't been heard yet.This is the 1st time in my 18 years that I've been stiffed on a bill.Other contractors have said that I should have just put a LIEN on his house.I work in Massachusetts.
What do you do to collect from deadbeat homeowners???
I work for ECs so this has not happened to me. However I have had to go to small claims court in Mass. before.
I recommend that you have any slips for stock with you with the items you installed clearly highlighted. I would also have pictures of the addition, even if just from the outside, it will be hard for this person to convince a judge that the addition in the picture has no electric.
When I went to court I won and I feel this is in part due to having as much info with me as possible.
Did you pull a permit? Did anyone?
If there where no permits pulled this could be a real issue for you and the homeowner.
Good Luck, Bob
Bob Badger Construction & Maintenance Electrician Massachusetts
Personally I would take my German Sheperds over there and let them have their way with him (I'd like to anyway).
You don't let these things happen to you. You sign and detail EVERYTHING and you definitely pull permits when you have to.
You can still put a lien on his property and take him to court.
I have never not gotten paid. One time this dirtbag tried but I set him straight in a hurry. Also, certain commercial service companies that I sometimes agree to do calls for try to screw me out of money but then I threaten to go to the Walgreens or the CVS or whatever and EXPOSE THEM and wouldn't you know....the check is in the PO box in a day..... Strange the way people will pay their bills if you approach things right...
Even if this guy ends up screwing you, you'd better learn from this one and don't allow it to happen again!
Get a lien .In West Virginia with a lien you will eventualy get your money. Here you can go to the courthouse and look about other liens on the property.I did a job onetime and got 1/2 of the money about 6 months later I had a lein put on the property .When I looked in the record book it looked like everyone he had delth with had a lein on the property. later on he needed a loan the finance co called me about him. I did get my money then. In WV you are not notified that there is a lein until it is to someone else tells you like a bank,finance co,ect. Also keep track of your hours involved in the collection process charge him for that too.This is time you could be working for a paying customer. I dont want to offend you but sometimes you have to think like a lawyer.
Be aware that you need to get your lein on the property within a certain amount of tome. Consult an attorney and next time stick with written contracts.
Unfortunately, if you're in your own business, collection is part of the business. Also, forget those litte demons that tell you to rip out your work. It won't look good to a judge and you'll pay much more later.
I've only had to lein two properties in twenty years. One I got paid for and the other I didn't (bankrupcy). In total I've lost about $2,000 in twenty years, about half of it with that bankrupcy, and the rest from eight other deadbeats. I keep track of it as a percentage as cheap amusement.
Try to sharpen your intuition with new customers. Usually deadbeats will give some clues. If the early process of your business with them isn't going well (estimating, contracting, phone calls, etc.) then the work probably won't be any better.
I have to be especially careful when I'm hungry for work. It's still better to walk away from bad business.
quote _____________________________________________"Try to sharpen your intuition with new customers. Usually deadbeats will give some clues. If the early process of your business with them isn't going well (estimating, contracting, phone calls, etc.) then the work probably won't be any better.
I have to be especially careful when I'm hungry for work. It's still better to walk away from bad business."
Screen all your customers, Always Have a signed contract, with a deposit of 1/3 to 1/2 of the job cost, and never work without a permit.
If you go to court with a signed contract and a permit, with the estimated amount stated, you will be awarded you payment 99% of the time, and with these papers any collection agency will happy to collect for you, for a fee of course.
I never tried this but I just had an Idea. When you rent a car, equipment, or make reservations they take the customers credit card numbers as security. I know a merchant can also "precharge" something. That's where it is verified if the customer has the available credit on the card and will reduce their spending limit to that amount. Kinda like the card company holding the money.
Before the job starts get a credit card # otherwise payment is due beforehand. If the customer does not have the available credit or cash then you know right away.
The downsides are credit card service cost the merchant a percentage and monthly fees. That's why I don't take them. The card company can also charge back the merchant in a dispute.
We do accept credit cards and it sure helps with additional business, and If you are offering a service, under a contract, put Installation Contract on the credit slip invoice, if there is a dispute, then contract law will determine the outcome, so always get a signed contract.
I did pull a permit on the job, and finished the rough stage of the work...and received rough payment.He owes me $1200 for finish work on the addition.The homeowner was acting as the GC for the addition and the job was very unorganized. We go to court this week,unless he can come up with another excuse to delay the hearing.I'll post the results. Does anyone know what the time limit for a LIEN is in Massachusetts?