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Is there anyway around them, it seems like our industry is dealing with them all the time. :(
 

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Lawsuits

This is a very good point of discussion for most of us in business for ourselves.
In my experience to date, the best course of action to take is a Pro-Active approach versus a Re-Active one.
The best advice I have to give is at the signing of a contract that there be an "Arbitration Clause" signed by the Contractor and the Customer. To my knowledge this is an agreement on the part of both parties "Not to Sue" but to have any disputes be settled by a "Third Party Professional Arbitrator."
In our case, we would have any disputes resolved thru arbitration services as provided by our membership with the BBB. It had been mentioned in the forum before that many people here do not feel the BBB is worth paying the membership for and I do not agree for several reasons, but that is a whole other subject.
Consider this, "It is like for those of us that choose to ride motorcycles,we fit in one of two categories, them that have crashed and those that will crash!!"
 

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I started in 1988 and now own 3 businesses. I have had one disgruntled customer, an Interior Designer, who thought that I charged too much. She continued to use me on her high-end customers though for 3 years. BTW she charged $150.00 per hour even though what you got was a decorator and had a sign in the back office 'Retail is wholesale plus 250%'. I charge too much? Anyway she is gone and I'm still here.
I've never been even close to a lawsuit.
 

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Thank God, here in Colorado the voters struck down Amendment 36 which would have opened up bigger liability to contractors allowing for uncapped punitive damages and even much worse would have not required a homeowner to even allow the contractor to try to remedy a solution before the homeowner calls a lawyer.
 

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I put this in my contracts-

"If a dispute arises out of or relates to this agreement, or breach thereof, and if said dispute cannot be settled by negotiation, the parties agree to first to try to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration, litigation, or some other dispute resolution procedure."
Don
 

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I like that. I just swiped it.
 

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Lawsuits

"Is there anyway around them"

Yep. Make everything clear and in-writing up front. If there's a dispute, be polite but firm.

"it seems like our industry is dealing with them all the time."

Not us. People will make fun of our contracts, but we've been in business for 17 years and our business has never been on either side of a lawsuit.

Tim
 

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The topic is law suits. A GC that I sub to sometimes asked me this I guess because I'm older. I haven't a clue to the answer and we'er all treading on some new ground due to the storms.
A guy in a condo stiffs you to the tune of 8K. He owns the condo but leases the grounds. You put a lien on the condo. The condo is condemned due to storm damage and the guy is going to collect ins. for his loss.
Will the ins. company do a title search prior to disbursing the funds to the deadbeat? Will you have to find out who his ins. co. is and try to chase them down before he gets his check? Your attorney has already advised you that a lawsuit will cost you more than you will recover. It has been 3 yrs. and you have recovered from the loss, should you just walk and figure that he will get his when he slowly turns on a spit in Hell.?
 

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Teetorbilt said:
A guy in a condo stiffs you to the tune of 8K. He owns the condo but leases the grounds. You put a lien on the condo. The condo is condemned due to storm damage and the guy is going to collect ins. for his loss.
Will the ins. company do a title search prior to disbursing the funds to the deadbeat?
My experience is - only if they will assume title to the property as a result of the payout. Otherwise, they have no obligation in regards to any incumberances that might exist.

Teetorbilt said:
It has been 3 yrs. and you have recovered from the loss, should you just walk
I would take the time to confirm that the lien is still in place and remind the condo owner of same.

This scenario demonstrates Mike's point about the importance of being familiar with the statutes for perfecting a lien (sorry, different thread). For example, in my state if the value of the improvement or repair performed ($8,000) is less than 15% of the value of the structure (the condo) then the lien can not be perfected. If I had filed the lien and the condo was worth more than $53,333 then I'd be SOL when I tried to collect.
 

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Teetor - where I am my understanding is a mechanics lien is not going to still exist in 3 years. They have time limits and if not cured they fall off automatically from the title.

Also, it is my understanding that if the guy has a mortgage on the condo, when the insurance company cuts him a check it will be in his name and the mortgage companies name.
 

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This guy owns the condo outright. Paid around 35K years ago and they were currently selling for around 600K. My thinking is that since he had no investment in the actual land that their would be no need for a title search and the ins. co. would simply pay him for the actual loss.
As far as a limit on a lien, I don't think that one exsists here. I was talking to a guy that installs and services small treatment plants (common for condos and apt.s here), he told me that it once took him 11 yrs. to get paid, but he got paid!
I'll let my buddy figure it out and post what happens.
 

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Mike, I know a guy that lived in this condo and had another friend looking to buy there last year.
It works like this. A developer corp buys the land, erects the building and sells the condos. Individual titles are issued for each unit but not for any rights to the land underneath it, that is leased. A lot of mobile home parks are set up this way as well. In this instance a parking space was include in the basic lease with additionals costing $50 a month, dockage was $7 a foot.
In this case the developer corp. has retained the land and the condo owners have ins. to recover their losses but no one will ever be able to buy that particular condo again. I suppose the condo titles wind up in the dead title box until someone cleans the box. I don't think that ins. companies have an obligation to do a title search prior to settlement and without a title transfer or search the lien will go undiscovered.
 
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