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Collecting a fee 8

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AELLC

AELLC

Structural
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I am a one-man shop specializing in structure design for tract and custom home builders, and a small custom home project I invoiced almost a year ago is still not paid ($1200)...the invoice was to the General Contractor for the house construction.

What would be a good next step, to notify my State Registration of Contractors?
 
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You could consider going to the small claims court, but you need to check to see what the minimum and maximum amounts that are allowed as it varies from state to state.

And if that fails, there's always 'Judge Judy' ;-)

John R. Baker, P.E.
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Can you contact him at all? Does he answer your calls?

If not, then camp out outside the General Contractor's office with a sign posted on your vehicle your vehicle that he has not paid you after a year, take a picture of it, and post it on the net on his Facebook account. Or have your lawyer write him a nasty note.

Small claims court is always a possibility, and I hope you have a written contract which would help things go more smoothly in court.

Mike McCann
MMC Engineering

 
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1) I think he has a "gatekeeper" named Evilorea who screens calls.

2) That sounds like backlash in the making, especially him being a contractor. Plus I don't have a lawyer.

3) Up to now, business has been conducted on a handshake business. I invoice the residential designer who is the "architect" for all these type of jobs, and he hands the invoice to the responsible party (in this case the contractor in question).

In the past I have had only a few unpaid invoices, always less than $300. Not really worth my time to pursue.
 
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Turn it over to collection. The collection agency will keep half, but you will cause him no end of inconvenience. Collection agencies start by creating collection records with all the credit bureaus and with the BBB. Then they start the harassing phone calls. Businesses really hate to be sent into collection and they will bad mouth you to anyone who will listen, but it doesn't sound like you want to work for them again.

Stay out of small claims court. Business get really bad treatment there and the "judges" often can't read a contract. You could easily end up losing and ending all of your recourse options just because the judge doesn't think you deserve $1200 without having to explain why (and small claims judgments are not able to be appealed).

A letter from a lawyer would cost you around 15% of the $1200 and does not have better than a 50/50 chance of success. Collection is probably 70/30 that you'll get $600 eventually.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat
 
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Wait, what? You don't have a lawyer? Get one NOW. Always good to have somebody you can call right away, if needed.

And wait again - you don't use written contracts? My insurance makes me promise to use written contracts or they say they'll greatly increase my premiums. I say in my contracts that if I have to argue with you for longer than X to get my money, and I have to get a lawyer involved, than you'll have to pay my invoice PLUS the fees for the lawyer. My one lawyer letter got the money, and fast.

I'd highly suggest taking a startup class at the local SCORE office, or small business helper agency office, to make sure you aren't missing anything else major, like registering your company with your state board, the county business office, etc.

Good luck!
 
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"I'd highly suggest taking a startup class at the local SCORE office, or small business helper agency office, to make sure you aren't missing anything else major, like registering your company with your state board, the county business office, etc."


I did do a consultation with a retired engineer but it was very unsatisfactory.

I am 100% legal in regards to all that above.
 
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AELLC (Structural),
If the guy has not paid after one year, he is not likely to do so unless he needs you for another job.
open an account with Dunn and Bradstreet. Use their credit reports to check the credit worthiness of your customers, and put on the bottom of your invoice, " We report to D&B", all but the most unscrupulous companies tend to pay attention to that.
Here attached is a link to a start page on D&B.
This advice is for future jobs.

For the present, Most of the advice above is valid. Figure you have lost that money anyway, turning the bill over to a collection agency may get you some of it back, if you are lucky.
B.E.

You are judged not by what you know, but by what you can do.
 
 http://business.dnb.com/your-business-credit/?utm_source=bing&utm_medium=cpc_tsa&utm_term=dunn_and_bradstreet_Exact&utm_campaign=MyCredit_Brand-HighPriority_Search_USA&medium=tsa&gclid=CNCyq-Pxl70CFQ1cKgoddGAAAA&gclsrc=ds
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The one thing that I find VERY difficult is the business end of things. I am so busy, I never do things well enough business-wise. I am going to try to visit said contractor in person first chance get on a slow day.
 
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With your evident prowess in excel, I think you could easily set up an efficient management system for many of the routine business activities such that only ten minutes per day would be required to keep on top of everything.... Proposals, collections prospects etc.
Client contact info on one sheet, standard proposal on another with your standard editable scope and standard disclaimer and terms from which you could generate a proposal almost instantly, job number and fee and invoice date on another sheet, and another sheet telling you days beyond invoice with the clients email address right there.... Click and email at term date (30 days?) and then follow ups as needed. A other sheet showing your pipeline.... Potential jobs in the queue and regular interval follow ups as you deem good.
At least, that's what pretty much what I do.
Easy to say now but, obviously never let an invoice go that long. I like the personal visit idea...try to flush out the problem or guilt them into a solution. After that I like the small claims court as, if you're going to expend such effort...might as well try for 100% instead of the 50% after collections....but if you lack any written afphreement! you're in a more difficult position....you'll need some kind of "evidence" for a judge.... If no paperwork could just be a note from a person who knows you did the work. I think the judge will award it to you if you did the work. The contractor can only argue that you did zero work to justify zero payment.
Good luck!
 
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By the way, that highly technical term I used above, afphreement!, was not something I learned at Harvard business, rather it was a burst of inspiration during my second beer - augmented by the genius of my iPad.
Best of success!
 
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But wait! There's more! If I am understanding your posts correctly, it sounds like your client is the designer and not the general contractor. Unless this is made clear, I think the judge might rule that the GC owes you zero, although the GC may owe the designed 1200 who in turn owes you 1200. Here, as Sita astutely implied, is where the lawyers earn their keep. I have one and am sorry to say I think we all should have one.
On my third beer, I promise, no more posts on this......
Best of luck!
 
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AELLC,
You can also look at my replies in forum thread732-359878 covering my wife's experience in small claims court.
If the guy is a sleeze bag, you may never get your money.
First try is the person to person meeting on the basis of " This may have just slipped your mind.", If that does not work, consider your time and lost income attending small claims court. You may be better off letting somebody else pursue this guy.
B.E.

You are judged not by what you know, but by what you can do.
 
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Triangled,

Yes that is true, I am a bit obsessed with Excel. I do have the business end semi-automated on Excel (I did try QuickBooks but didn't see it amenable to my type of business), but my business Excel is a bit of a mess and needs a lot of work.

I have been aware of this uncollected account because when I receive payment, I enter date and amount and that changes a red highlighted cell to green.

The way this all works: Builder (B) approaches Res Dsgnr (RD) to start on a house, RD shows B how much my fee is because RD has my fee table of XXXX sq ft = $ fee, RD gets drawings to point of where framing and other structure needs to be redlined by me, I do my stuff, RD hands over stamped dwgs and calculations to B, and at that point B either hands over a check to RD or promises to send it in the mail soon. The check will be cut by either B or the house owner.

Eventually, I get check in the mail form the RD, not even knowing who the B ever was, unless there is a plans check or construction problem. Actually this all makes sense MOST of the time to cut down on phone calls and emails.

Obviously this is all different how things are done with commercial projects, where there is an actual General Contractor known to you all along.
 
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Berkshire,

I don't want to waste time and get all stressed attending small claims court. The way I look at it, working on said project incurred very little overhead (my overhead is nearly bupkus all the time anyway), and I had to turn away any other work while I was working on said project.



 
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^and it's not like I had to turn away any other work while I was working on said project.^

 
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AELLC (Structural),
Then turn it over to a collection agency and move on.
B.E.

You are judged not by what you know, but by what you can do.
 
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AELLC....I also struggle with the business side. I've been in your shoes many times. My larger problem was not invoicing to begin with, so collections were sometimes way down the road after a late invoice. Some I could never collect.

As a professional you have lien rights. Most states have limitations on when you can file a lien on real property. You have likely exceeded that time limit, but keep it in mind for next time.

A common lien limitation is 90 days after your last activity on a job. If you file a lien within that time period, it is usually valid (assuming you had a valid reason for filing!). The filing fees are usually light and many counties have relatively easy forms for filing, particularly for construction liens (some places still call them "mechanics" liens....essentially the same things). A lien can be a strong motivator to pay, particularly for a contractor, since there is usually a lending institution involved with the process and they will require that all liens be cleared before final loan payouts occur.

Most state licensing boards do not get involved with pay disputes, unless there is repeat evidence of numerous liens filed against a particular contractor for non-payment. That often indicates diversion of funds by the contractor which is usually illegal.
 
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Might take a look at this string...

Non Paying Client Helpful Member!(2)

thread732-359878

Mike McCann
MMC Engineering

 
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I agree with Ron, if you wanted to collect the best way to go was through a lien.... but at a year you are out of luck. I had a client who took my plans and ran off... was an old coworker. As far as I know the project never went forward and that was the excuse for not getting paid. I knew he was going to do it to me and I was out $1,000. Well, when he comes crawling back, and he will, I will tell him to find someone else.

Most of my other projects are commercial projects that require CA. I write my proposals such that I get paid for certain milestones leaving 10-15% of the contract for CA. When time comes to sign off and I haven't been paid I refuse. This might not be ethical but it works pretty well.
 
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