# Customer isn't paying...



## stanfordconst (Mar 7, 2010)

How to deal with a customer who isn't paying?? I have one that owes me $3K+ and is now over a month overdue. What are my options?

Unfortunately, since I've never run into this trouble, I've been lax on my contracts. I haven't been getting my customers to sign any type of contract. I give them my bid/estimate, which has a good amount of verbiage about customer responsibility when it comes to paying, etc. They usually reply via email that they want me to do the work. But I don't have them actually sign a contract.

Perhaps this is my wake up call to make things more formal??


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## Rustbucket (May 22, 2009)

Yep, this is your wakeup call. However, since you have e-mails showing that the customer accepted the bid, I think you'll be okay. I might be a bit more hassle, though. Have you sent them an e-mail requesting payment? If so, have they responded? The key here is intent. If they have written in e-mails that they intend to pay, this will just strengthen your case if you go to court. The key here is documentation.


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## mics_54 (Oct 28, 2008)

I can collect the debt on your behalf for a small percentage...but you'll need to sign a contract


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## Hardly Working (Apr 7, 2005)

Send a final payment notice via "Certified" mail so they have to sign for it.

That way there is none of the "I never got your bill" BS. 

Follow up with a phone call after you get your notice back from the post office. If you get no where, then send them an intent to lien notice, again "Certified" mail. 

After that have a lawyer send them a nice letter letting them know that to avoid any legal action it's in their best interest to pay the bill


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## cueball707 (Jan 18, 2007)

I got burned once early in my career as a contractor. Never again. I make everyone sign a contract before we start any work. Unfortunately you can't trust anyone these days.


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## ESSaustin (Mar 27, 2010)

I am amazed at how many post threads like this! It takes so little time to write a contract (really just modify it, per current project) and have the client sign it. Do you need access to one? There are some in the file swap, and your local AIA very good ones which you can modify if need be.


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## thom (Nov 3, 2006)

Without a detailed written and signed contract, there is no agreement. You can talk for hours with your customer but in the end, that piece of paper is all that matters. Real Estate contracts must be in writing. Without that, there is no agreement. 

The contract spells out exactly what you will do, when it will be done, what the customer will do, including how much and when they will pay, and a host of other terms. 

At this point, there is a disagreement over something and you are stuck holding the bag because you failed to do your job and provide a proper contract. It's a harsh way to learn the lesson, but apparently in your case, it's the only way.


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## katoman (Apr 26, 2009)

Agreed, how many times do we here this? When will some contractors learn not to let the HO get into them for any real amount of money.

3 grand isn't so much unless the job was 5 grand. At the end of any job, you should have 90% of your money.

I don't care what the industry standard is, or what other contractors are doing. I don't finance projects, PERIOD. I tell the HO that I'm in the consturction business, not the financing business.

I tell them I will do everything for them from the actual work to getting the permits, finding and dealing with the subs, sourcing the best materials, dealing with inspections, and so on. But I will not also put out my money for their project.

Believe it or not, most understand this. 

Give me money, when it runs out, you give me more money, etc. etc. etc.


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## bauler (Nov 10, 2006)

Verbal contracts are contracts, but prove it. What are your lien rights under Colorado law? For $3k can you sue in small claims? Are you finished with the job? Is there any problems with your workmanship? I normally collect right on the spot from the costumer, unless another payment arraignments have been agreed upon in advance or a small job from a long time customer. If its that's not agreeable please hire another contractor. Its a big red flag when someone wants you to do work and then bill them. Thats why they invented banks.


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## tedanderson (May 19, 2010)

> How to deal with a customer who isn't paying?? I have one that owes me $3K+ and is now over a month overdue. What are my options?


What kind of job was it? 

I once knew an A/C guy who could ensure resolution if there was ever problem with the HO paying what was owed. One day last summer he did a job and the check bounced. No problem. It can happen to anyone. So he called them to see about making good on the check but his calls went unanswered and unreturned. So about 2 weeks later he went over to the house while the HO was at work and reclaimed all of the freon that he delivered into the system. 

A few days later he gets a call from the HO saying, "Uhh.. hello Mr. A/C guy.. I know that you've been trying to get a hold of me.. but I've been busy and out of town and my dog had an ear infection blah blah blah....but I've got your money....oh, and BTW, can you look at our system? It was working fine the other day..."

And it's a shame when we have to go to those types of extremes just so we can make sure that we can eat.


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## griz (Nov 26, 2009)

Do you know why they aren't paying?
Did the scope of work get expanded and your original estimate was out the window? Are you guys communicating without shouting & accusing each other of whatever? Have you done a certified letter outling your bill and requesting funds? Good Luck.


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## JumboJack (Aug 14, 2007)

tedanderson said:


> What kind of job was it?
> 
> I once knew an A/C guy who could ensure resolution if there was ever problem with the HO paying what was owed. One day last summer he did a job and the check bounced. No problem. It can happen to anyone. So he called them to see about making good on the check but his calls went unanswered and unreturned. *So about 2 weeks later he went over to the house while the HO was at work and reclaimed all of the freon that he delivered into the system. *
> 
> ...


That is illegal.


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## astor (Dec 19, 2008)

JumboJack said:


> That is illegal.


If your contract has a cause like mine, it is not illegal.Not sure how can be forced, but it is there!

PURCHASER accepts and agrees that the materials delivered and installed are property of SELLER until it is fully paid and SELLER has right to remove them from premises.


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## JumboJack (Aug 14, 2007)

astor said:


> If your contract has a cause like mine, it is not illegal.Not sure how can be forced, but it is there!
> 
> PURCHASER accepts and agrees that the materials delivered and installed are property of SELLER until it is fully paid and SELLER has right to remove them from premises.


In California that would illegal too,not sure about Texas.Once the materials are on the job site they legally become the property of the owner.Installed or not.


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## tbronson (Feb 22, 2010)

In California it would be theft. I would guess that Texas, being a law and order state, would be the same. Send mail certified and start the lien paperwork.


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## katoman (Apr 26, 2009)

That's the same here in Ontario. Once it's on the premises, it's the HO's.

Only had one occasion where we were forced to remove materials from a site. The HO had been arrested for theft and fraud the night before. We cleaned everything we could out of there.

Later the premises were seized and sold by the bank. Bad day for him.


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## rotarex (Mar 31, 2008)

Contracts dont mean Squat. 
you are gonna spend more of your money and time to get back your money. 
and about a year later, divorce, bald head, workers quit, bankrupt. you will see your money.

Put in your contract 
all material belongs to YOU until final payment is received and approved
you are allowed on property during 8-5 ect ect 

this way when you are removing your project what ever it may be, they cannot say anything, neither when the cops up they cannot say anything


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## Fallen (Feb 25, 2009)

Mailing a letter requesting payment along with your final invoice via certified mail is a good idea. A personal visit may also be a good idea as HO's tend to be a lot more brazen over the phone. Now be advised the US Postal Service will as a rule make three attempts to serve a certified letter upon the addressee. If the HO never answers the door (or is never home) the mail carrier will, by the 3rd attempt, have the letter returned to you as "UNCLAIMED". Upon each attempt the carrier should leave a notice taped to the HO's door informing them they need to claim their certified mail at the P.O.

But lets face it, certified letters are almost never good news and their's a fair chance they won't claim your letter, but at least you went thru the motions. It has been my experience that people who don't claim their Certified Mail, may well have a history of avoidance when it comes to paying their bills. 

But the best piece of advise I can give you is DON'T WAIT to do something about it. The longer you wait to take action, the more difficult it will be to recover your money.


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## JumboJack (Aug 14, 2007)

rotarex said:


> Contracts dont mean Squat.
> you are gonna spend more of your money and time to get back your money.
> and about a year later, divorce, bald head, workers quit, bankrupt. you will see your money.
> 
> ...


You can put that in your contract all you want but it doesn't make it legally binding....


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## rotarex (Mar 31, 2008)

JumboJack said:


> You can put that in your contract all you want but it doesn't make it legally binding....



as long as they sign to it, it makes it.


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