What Do You Do If An Owner Won't Pay? - General Discussion - Contractor Talk

What Do You Do If An Owner Won't Pay?

 
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Old 06-15-2010, 10:43 PM   #1
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What Do You Do If An Owner Won't Pay?


I'm sure most of you have had an owner that refuses to pay you for work. They probably make up some excuse, but it's really because they just don't want to pay you the money. Of course you could sue them or take them to small claims court, but that is a long arduous process.

Has anyone sent them to collection or reported them to credit agencies? Does it cost money to do this? Can you collect the entire amount owed? Does threatening to damage credit really work?

Any help would be appreciated.

Thanks,

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Old 06-15-2010, 10:49 PM   #2
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Re: What Do You Do If An Owner Won't Pay?


Quote:
Originally Posted by constructonomics View Post
I'm sure most of you have had an owner that refuses to pay you for work. They probably make up some excuse, but it's really because they just don't want to pay you the money. Of course you could sue them or take them to small claims court, but that is a long arduous process.

Has anyone sent them to collection or reported them to credit agencies? Does it cost money to do this? Can you collect the entire amount owed? Does threatening to damage credit really work?

Any help would be appreciated.

Thanks,

Construction blog
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Old 06-15-2010, 10:49 PM   #3
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Re: What Do You Do If An Owner Won't Pay?


Do you have a written contract with them?
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Old 06-15-2010, 10:50 PM   #4
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Re: What Do You Do If An Owner Won't Pay?


You really can't do anything you mentioned until after you go to court and get a judgement against them.
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Old 06-15-2010, 10:52 PM   #5
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Re: What Do You Do If An Owner Won't Pay?


1st of all you should never give a client a reason not to pay you, job must be perfect.
to make perfect = time
time = money
client no have that budget= you say thanks for your interest in my company and bye
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Old 06-15-2010, 11:12 PM   #6
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Re: What Do You Do If An Owner Won't Pay?


Yes, assume you have a contract and they still won't pay, or they won't pay for extra work that was authorized.
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Old 06-15-2010, 11:13 PM   #7
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Re: What Do You Do If An Owner Won't Pay?


File lien. Go to court.
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Old 06-16-2010, 08:14 AM   #8
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Re: What Do You Do If An Owner Won't Pay?


In 3 years of business, I never had that problem and hope I never will.

Is there a reason why that want pay?

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Old 06-16-2010, 08:16 AM   #9
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Re: What Do You Do If An Owner Won't Pay?


I don't know the laws in PA. I am just over the border in NY and have gone the small claims route twice. I won both times and the court found no problems with my work or contract and awarded me the full price of my claim.

Now for the sad part. Small claims courts here in NY have no ability to enforce payment of judgements. I needed to file a lien against the HO with the county clerk by bringing the court judgement and paying more to file it.

I did get paid by one homeowner but two years later when they sold the property. The title search company found my lien and forced payment before the sale could go through.

I will probably never see the money from the second claim because it is my responsibility to re file and update the lien. If the HO goes bankrupt or gets foreclosed on, which is almost certain in this case, I will likely be SOL.

Before I retired from this business I instituted a few rules I lived by.

#1- Never use your money or accounts to purchase materials for a client.

Get cash or a check and make sure it is good before installing or using any materials. It is a very painful reminder every time I pass the house and see them sitting on my wood that I purchased and built the deck with and never got a dime for.

#2- Set a strict policy for payment of labor at one weeks salary. If there is no payment at the end of the week there is no more work--PERIOD!

I can afford to loose a week but I am not donating any more than that. If they are unhappy with my weeks work then we discuss it right there and then. On both occassions, I had dead beats in hock up to their rears who simply could not afford the work they hired me to do.

#3- On Friday, if this is your work week end, remove all your tools and materials unless you are paid in full and absolutely sure the payment is good. You have no right to re enter the property to fetch your stuff if you find out they refuse to pay for some dumb reason or refuse to allow you entry. The police can't get involved in a he said she said dispute and will tell you it is a civil matter.

Contracts are a great deterent for honest folks but mean very little to scammers and when ever lawyers have to get involved you can be sure they will end up with your money.

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