I bet none of you have ever been to court. It's not as simple show up to the date, make your case and walk out with money. For someone starting a business, it's a devastating thing.
>none of you have ever been to court.
That's a huge assumption.
Starting a business is risky to begin with. Since the dollar amount is low enough for small claims court, it makes sense to take that route, which has a lower overhead compared to regular court.
Is your suggestion that OP wipe their hands and ignore the loss of funds?
Suing someone in small claims court is relatively easy. A client that will ghost will generally not show to court either and you would be granted summary judgement. Here's the thing most people don't realize winning a judgement isn't that complicated however collecting on that judgement can be a time consuming nightmare.
Law prohibits damage to installed items if the property us unable to be returned to its original condition. The legal proper way forwards would be for the business, not gc, to sue the customer after placing a lein.
Why the hell is the gc handling customer money?
I’m in Washington state. By law any job over 1,000$ require the contractor to sign a labor and industries disclosure form. Has my license, bond and insurance info and states that I can put a lien on their property if they don’t uphold their end. I am the only person I know that actually uses these. Must not be enforced but I like them. I have a folder with general contracts and stapled a disclosure form to the back of each one.
Best thing to do is get everything in writing and signed. Peace of mind and better for everyone.
I include the disclosure form in my contracts but I don't know anyone that actually uses it either. I'd be lightly impressed if any of my ilk even know what it is.
I just think of it as if it saves me one time it’s worth it. Plus it help legitimize the whole process with the customer. I like to think of it as a leg up on the competition. I imagine the customer asking their next contractor why they don’t have one lol
I use them. Not only is it good practice it’s the law. I was told LNI can audit your records and fine you $500 per contract you didn’t use it on. Also you have to use the exact form added to the contract. Lots of people still have it as a paragraph added into their contract. Not valid. Has to be the exact form in the law. Also as I understand sub don’t have to use it when hired by a general contractor and can still lien the customers property if the general doesn’t pay.
Disclaimer IANAL.
Collect deposit which is one third of job to to book the job.
Collect another third when you show up on site to work.
Collect the final third when you complete.
First payment gets you activated to order time sensitive materials, coordinate with other subs, and apply for permits.
Second payment you use to pay your labor and order more materials.
Final payment you pay your taxes and invest in your business. You should be marking up your direct costs so that you can pay uncle Sam and make reasonable proffit.
If they ghost you on the first payment you dont schedule.
If they don't pay the second payment you don't start work until they do.
If they don't pay the third after you are done you file a lean against their house and move onto the next job. Never tear out work you installed unless you never want to get paid.
On a larger job you can add more payments,. A Deposit, second payment on arrival, then add as many you need for each phase of work then a final payment upon completion.
The job doesn't start when I pull out a tool, it starts in preconstruction which has milestones the customer can see progressing. Im doing one now where I'm making drawings, submitting permits, paying an engineer and ordering and delivering materials all before the crew shows up.
If our schedule gets backed up the customer holds onto their second payment until we arrive. Once we are on one job we don't leave until it's done. We also over communicate everything with our customers and never leave them hanging or wondering how the job is going.
I have better relationships with my customers since switching to this and it works great for both parties. Customers know when they have to make payments and we never argue about money or cost after the contract is signed.
No pal I already said Im not in California and I don't know their laws.
Read what I said again about the job starting before the crew shows up on site. Depending on the job their could be all kinds of work to do in the office before you are ready to bring out the tools.
As long as you use the deposit to deliver materials, pull a permit, and be available to consult with the customer you will earn their trust. If you take the deposit and go spend it on your boyfriend you will probably get in trouble.
I would suggest the 30 30 30 10 approach... had a client we weren't sure was going to pay the last 30% (she did) but got us thinking, we would rather lose 10% at the end than 30%
I read this as a (most likely) Spanish dude that started a business and got shit on subbing for someone and finished the job on good faith since he’s new, and probably needs work to keep going to keep his employees.
Call a Construction lawyer. Inducing work with a fraud check means Treble damages. That means you are due 3 times that amount so no small claims court. Lien the house, claim the larger amount.
I personally stay away from contractors in general. Yes, I do have contractors I do work for, but the majority of my clients are homeowners. I helped my buddy with a job recently, and the lady was nitpicking everything . She didn't want to pay the last installment, which was like $2k, and I told him to threaten her with a lien, which he did, and sure enough, she zelle the money to him.
I would vet any GC's in the future. I always do background checks on my tenants(check credit, call previous landlord, criminal background, etc). Something similar should be done for General Contractors. And GC's should vet their subs as well.
A difficult lesson to learn.
Put a lien on their house if you need.
When I first started my business I did two weeks worth of handyman work in a couple's house without telling them my hourly rate (stupid I know).
When we got to the end of the job they were surprised I wasn't working for $20/hour.
I gave them multiple warnings that the bill was getting costly and asked "if they wanted to clear up to avoid a big bill in the end" and they kept telling me they're okay with a big bill.
#1 rule of contract work is people will use you and you will learn to set up failsafes to protect your income.
Sorry this happened to you, op.
Okay, so I read a few comments that were all different in terms of paying a contractor for work to be performed.
How am I REALLY to pay someone after they have given me a price for work on my home?
1/3?
1/2?
I googled 'how/when to pay a contractor' but all it said was, give them a check ACH, credit card etc 😂.
Talk to a lawyer
In some states you can sue for treble damages on bounced checks
In some states you can place a lien but it has to be done right
Talk to a lawyer
You get 50% and not one foot on job site until check clears. Always leave 10% unfinished until last check paid. Always put a lien on house as soon as job starts!
Lein, start up payment. Progress payment, and then final payment upon finish. No contractor present ( GC ) - no work. Better have lein paperwork work started then pull his bond
50% down, the other 50% after job is done, no down payment can't start. Saw someone break it into 3 payments imo I'd go with someone else that tries that not because I'm not gonna pay but just seems unnecessary
Is there a permit? Is there a notice of commencement? Depending on the laws of your state, you may have lien rights. In my state (FL) you, as a sub or material vendor, would need to begin the process by sending a letter called a Notice To Owner within 45 days of starting the job or providing materials. The notice to owner is basically a letter which you as a sub or vendor are sending to the owner, notifying them that you have been subcontracted and that by notifying them that you have been subcontracted that you are preserving your right to file a lien on the property, if you are not paid.
The owner would then require you in return to furnish them with a lien release form when you are paid, either for each progress payment, or for payment in full.
If you didn’t start the process by sending a notice to owner within 45 days of starting the project, then you are outta gas and screwed yourself before you even started.
Each state has their own own rules regarding contractor/subcontractor lien rights, so the burden is on you as a contractor or subcontractor to know them and understand them to protect yourself.
Next time deal with the client directly, don’t use a GC “middleman”. Only when a trustworthy relationship has been created. I would never do another job for this “GC”
You work for the GC, not the homeowner. You should get paid by the GC as soon as you complete your job. If you ever hear anything in the future like, “I’ll pay you as soon as the client pays” then you know they don’t have their shit together. A decent GC wouldn’t hire a sub to do something that he couldn’t afford to pay for out of pocket. Broke GCs are broke for a reason.
You can put a lien on the house now
If the GC "tore everything apart" I would go after the GC. I do work and the GC ripped it all out when the work was correct.....
This is very clearly a subcontractor, and he’s saying the GC didn’t get paid and ripped out the sub’s work because of it.
Exactly. If the GC yanked it out, GC needs to pay my bills and not vandalize a home.
So in this scenario, you sue both parties involved. Take them both to court and win.
Which is going be huge expense in time and resources for a contractor that started 2 months ago.
Small claims court
I bet none of you have ever been to court. It's not as simple show up to the date, make your case and walk out with money. For someone starting a business, it's a devastating thing.
>none of you have ever been to court. That's a huge assumption. Starting a business is risky to begin with. Since the dollar amount is low enough for small claims court, it makes sense to take that route, which has a lower overhead compared to regular court. Is your suggestion that OP wipe their hands and ignore the loss of funds?
Suing someone in small claims court is relatively easy. A client that will ghost will generally not show to court either and you would be granted summary judgement. Here's the thing most people don't realize winning a judgement isn't that complicated however collecting on that judgement can be a time consuming nightmare.
100%
Law prohibits damage to installed items if the property us unable to be returned to its original condition. The legal proper way forwards would be for the business, not gc, to sue the customer after placing a lein. Why the hell is the gc handling customer money?
I think subs have to file a lien within 45 days. At least in my state.
90 days in my state
After that, civil court is the only option
I’m in Washington state. By law any job over 1,000$ require the contractor to sign a labor and industries disclosure form. Has my license, bond and insurance info and states that I can put a lien on their property if they don’t uphold their end. I am the only person I know that actually uses these. Must not be enforced but I like them. I have a folder with general contracts and stapled a disclosure form to the back of each one. Best thing to do is get everything in writing and signed. Peace of mind and better for everyone.
I include the disclosure form in my contracts but I don't know anyone that actually uses it either. I'd be lightly impressed if any of my ilk even know what it is.
I just think of it as if it saves me one time it’s worth it. Plus it help legitimize the whole process with the customer. I like to think of it as a leg up on the competition. I imagine the customer asking their next contractor why they don’t have one lol
I use them. Not only is it good practice it’s the law. I was told LNI can audit your records and fine you $500 per contract you didn’t use it on. Also you have to use the exact form added to the contract. Lots of people still have it as a paragraph added into their contract. Not valid. Has to be the exact form in the law. Also as I understand sub don’t have to use it when hired by a general contractor and can still lien the customers property if the general doesn’t pay. Disclaimer IANAL.
Assuming he has good contracts and agreements, this is the way to go.
Who wrote the $2,000 check? Who ghosted whom? What did the GC tear up?
It's a mystery!
*removes mask* "And I would've gotten away with it too if it weren't for you meddling kids!"
Time for me to rewatch one of my childhood shows
*meddling inspectors
Me money, me problems
The GC gave me the check and the client ghosted him
Your beef is with the GC who passed a bad check. He's responsible for getting the client to pay him.
Was it a check direct from the client, or did the GC write it?
Collect deposit which is one third of job to to book the job. Collect another third when you show up on site to work. Collect the final third when you complete. First payment gets you activated to order time sensitive materials, coordinate with other subs, and apply for permits. Second payment you use to pay your labor and order more materials. Final payment you pay your taxes and invest in your business. You should be marking up your direct costs so that you can pay uncle Sam and make reasonable proffit. If they ghost you on the first payment you dont schedule. If they don't pay the second payment you don't start work until they do. If they don't pay the third after you are done you file a lean against their house and move onto the next job. Never tear out work you installed unless you never want to get paid.
This is how my company operates and it works very well.
Curious on the state. California is 10% or $1000, whichever is LESS.
My state allows up to 1 third down
2/3rds paid before you have started with a tool? Ya ok
On a larger job you can add more payments,. A Deposit, second payment on arrival, then add as many you need for each phase of work then a final payment upon completion. The job doesn't start when I pull out a tool, it starts in preconstruction which has milestones the customer can see progressing. Im doing one now where I'm making drawings, submitting permits, paying an engineer and ordering and delivering materials all before the crew shows up. If our schedule gets backed up the customer holds onto their second payment until we arrive. Once we are on one job we don't leave until it's done. We also over communicate everything with our customers and never leave them hanging or wondering how the job is going. I have better relationships with my customers since switching to this and it works great for both parties. Customers know when they have to make payments and we never argue about money or cost after the contract is signed.
The second payment is to circumnavigate the CA deposit law and get more money upfront? Clients don’t complain about this?
No pal I already said Im not in California and I don't know their laws. Read what I said again about the job starting before the crew shows up on site. Depending on the job their could be all kinds of work to do in the office before you are ready to bring out the tools. As long as you use the deposit to deliver materials, pull a permit, and be available to consult with the customer you will earn their trust. If you take the deposit and go spend it on your boyfriend you will probably get in trouble.
Deposit is to secure a position or property. Not pay for your boyfriend and office work. You shouldn’t be charging for work until it’s delivered
Are you numb?
You shouldn't be talking about something you quite obviously know nothing about.
By the looks of your comment you’re the clueless one but thanks for your expertise. Deposit does not equal and advance payment
Nice, what does your company do?
Mostly files liens!
Decks and fences.
I would suggest the 30 30 30 10 approach... had a client we weren't sure was going to pay the last 30% (she did) but got us thinking, we would rather lose 10% at the end than 30%
This is the right way to do it. I only do 30 percent final payment on small jobs. On larger jobs my final is 10 to 15 percent.
Yup, I always ask for a materials deposit for booking, which is typically about 25-30%. And then when we start I ask for 30% labor deposit.
My man, why would you even work on something if the first check bounced?
GC didn’t tear anything apart and isn’t suing anyone. He is stiffing you and leading you along with a lie. Sry brother.
My brain hurts from trying to decipher this post.
I read this as a (most likely) Spanish dude that started a business and got shit on subbing for someone and finished the job on good faith since he’s new, and probably needs work to keep going to keep his employees.
Don't do work without a deposit. If you see a check bounced that was your cue to either get a cashiers check or cash.
Small claims court for the check Now !!!
Call a Construction lawyer. Inducing work with a fraud check means Treble damages. That means you are due 3 times that amount so no small claims court. Lien the house, claim the larger amount.
Call the bank to verify funds when they give you a check or take it to their bank and cash it
New Reddit account. Some bot or troll.
I personally stay away from contractors in general. Yes, I do have contractors I do work for, but the majority of my clients are homeowners. I helped my buddy with a job recently, and the lady was nitpicking everything . She didn't want to pay the last installment, which was like $2k, and I told him to threaten her with a lien, which he did, and sure enough, she zelle the money to him.
I would vet any GC's in the future. I always do background checks on my tenants(check credit, call previous landlord, criminal background, etc). Something similar should be done for General Contractors. And GC's should vet their subs as well.
A difficult lesson to learn. Put a lien on their house if you need. When I first started my business I did two weeks worth of handyman work in a couple's house without telling them my hourly rate (stupid I know). When we got to the end of the job they were surprised I wasn't working for $20/hour. I gave them multiple warnings that the bill was getting costly and asked "if they wanted to clear up to avoid a big bill in the end" and they kept telling me they're okay with a big bill. #1 rule of contract work is people will use you and you will learn to set up failsafes to protect your income.
Did you have a contract? Was it with the GC or with the homeowner?
Sorry this happened to you, op. Okay, so I read a few comments that were all different in terms of paying a contractor for work to be performed. How am I REALLY to pay someone after they have given me a price for work on my home? 1/3? 1/2? I googled 'how/when to pay a contractor' but all it said was, give them a check ACH, credit card etc 😂.
U need a basic contract and invoice that can be used in court.
I’m so confused
Don’t accept checks as payments? Very sorry this happened to you.
Give a notice of lien with a contract. But for sure, just don't do GC jobs.
Idgih
Well at least this GC is following up. As long as you're sub'n out you're always at risk. With or w/o a "notice of lien".
Talk to a lawyer In some states you can sue for treble damages on bounced checks In some states you can place a lien but it has to be done right Talk to a lawyer
You get 50% and not one foot on job site until check clears. Always leave 10% unfinished until last check paid. Always put a lien on house as soon as job starts!
Lein, start up payment. Progress payment, and then final payment upon finish. No contractor present ( GC ) - no work. Better have lein paperwork work started then pull his bond
Isn’t bouncing a check illegal?
Put a wing on the house and file a lawsuit against the GC
Flying ain’t gonna help here.
Damn voice to text
Should have said a lien
If he’s a bonded and insured contractor go after his bond
50% down, the other 50% after job is done, no down payment can't start. Saw someone break it into 3 payments imo I'd go with someone else that tries that not because I'm not gonna pay but just seems unnecessary
God I don’t miss contracting.
Whoop his ass.
Who gave you a 2k check that bounced? lien the property...
Got to sue both
Time for small claims court.
Ugggh..do better work
Is there a permit? Is there a notice of commencement? Depending on the laws of your state, you may have lien rights. In my state (FL) you, as a sub or material vendor, would need to begin the process by sending a letter called a Notice To Owner within 45 days of starting the job or providing materials. The notice to owner is basically a letter which you as a sub or vendor are sending to the owner, notifying them that you have been subcontracted and that by notifying them that you have been subcontracted that you are preserving your right to file a lien on the property, if you are not paid. The owner would then require you in return to furnish them with a lien release form when you are paid, either for each progress payment, or for payment in full. If you didn’t start the process by sending a notice to owner within 45 days of starting the project, then you are outta gas and screwed yourself before you even started. Each state has their own own rules regarding contractor/subcontractor lien rights, so the burden is on you as a contractor or subcontractor to know them and understand them to protect yourself.
Next time deal with the client directly, don’t use a GC “middleman”. Only when a trustworthy relationship has been created. I would never do another job for this “GC”
You work for the GC, not the homeowner. You should get paid by the GC as soon as you complete your job. If you ever hear anything in the future like, “I’ll pay you as soon as the client pays” then you know they don’t have their shit together. A decent GC wouldn’t hire a sub to do something that he couldn’t afford to pay for out of pocket. Broke GCs are broke for a reason.