# Overhead & Profit



## Ptshaff559 (Mar 23, 2013)

I will make this as short as I can My company just completed a 1 year remodeling project started out as a insurance job then owner decided to update 95% of this home 12 sub contractors 7 contracts, You got the picture the owner lives in Illinois this house is in Massachusetts, Every time I invoiced her she sent money( I have done work for this lady for 10 years ) She lives the work happy as can be, She met with the insurance adjuster back in 1/16/13 that's when the **** hit the fan she thought she was going to collect more than she did, Thus lady has 4 homes 1800 acres in Illinois as u can properly figure she's into me for $ 162,000, $ 76,900 is Over head & Profit We have 4 sq of siding to complete project, I went on vacation came home to a letter from a attorney telling me she wants me of her property Wow the kicker is she filed 3 insurance claims and received payment for O&P


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## Warren (Feb 19, 2005)

What a first post!

Was there not a payment schedule? What did your contract say?


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## CScalf (Dec 18, 2008)

Warren said:


> What a first post!
> 
> Was there not a payment schedule? What did your contract say?


Contracts, AIN'T NOBODY GOT TIME FO DAT!:w00t:


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## CScalf (Dec 18, 2008)

Ptshaff559 said:


> I will make this as short as I can My company just completed a 1 year remodeling project started out as a insurance job then owner decided to update 95% of this home 12 sub contractors 7 contracts, You got the picture the owner lives in Illinois this house is in Massachusetts, Every time I invoiced her she sent money( I have done work for this lady for 10 years ) She lives the work happy as can be, She met with the insurance adjuster back in 1/16/13 that's when the **** hit the fan she thought she was going to collect more than she did, Thus lady has 4 homes 1800 acres in Illinois as u can properly figure she's into me for $ 162,000, $ 76,900 is Over head & Profit *We have 4 sq of siding to complete project,* I went on vacation came home to a letter from a attorney telling me she wants me of her property Wow the kicker is she filed 3 insurance claims and received payment for O&P




So you should only be owed about what? maybe 1k?


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## overanalyze (Dec 28, 2010)

How did you let it get that far? Its your fault. I am not saying she's innocent, but its your fault it got that out of control. Get all your paperwork in order and get a hold of your attorney. File lein papers immediately. Let us know how it progresses.


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## VinylHanger (Jul 14, 2011)

Lucy, you got some 'splainin' to do. :whistling

No way should you be even near those figures near completion. I am assuming there is more to the story, but the main thing is you didn't keep a payment schedule. You must be a huge company to get that far behind and then worry about getting paid. Time for a lien and your lawyer to get involved.

And like was asked before: What's your contract say? Not that it will be a silver bullet, but it is a place to start. On a job that big, you should have a kick ass contract. Time to kick some ass.

Good luck. We've all let things get away from us, not usually to this extent though. That is madness; to put it mildly.


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## CENTERLINE MV (Jan 9, 2011)

Okay. We need more details.....


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## Ptshaff559 (Mar 23, 2013)

I agree it's my fault but I have done work for this lady for 10 years. She ask me to get to gather the final invoice that she needed to talk to her financial advisor we had a talk she said not to worry I have 300 emails from her saying the same


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## Tom M (Jan 3, 2007)

I read an article a while back from a success contruction company about contracts and billing an ever since I have used the financing part of it.

Special order materials= check at signing, schedule commitment also =signing deposit, bench mark installment/inspections, change order=in full with next installment and then 2 finals. Last one only hold 5% for punch list. And there is always a punchlist. Neither party is ever out much and you not being held hostage for thousands of dollars when 90% of the work is done.

Good luck


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## Ptshaff559 (Mar 23, 2013)

Warren said:


> What a first post!
> 
> Was there not a payment schedule? What did your contract say?


No we signed a contract in the beginning all this other work was do to structural issues while we where fixing those issues she decided to replace windows remodel kitchen


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## Tom M (Jan 3, 2007)

Ptshaff559 said:


> No we signed a contract in the beginning all this other work was do to structural issues while we where fixing those issues she decided to replace windows remodel kitchen


This where big companies have an advantage. They can stay on top of paper work. 
I hope it works out for you, the next best thing to written agreements to changes is to get it in E-MAIL!


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## VinylHanger (Jul 14, 2011)

Change orders would necessitate a new payment schedule. Just because she said don't worry, doesn't mean you shouldn't worry. What if she says the check is in the mail. Are you ongoing to send out checks to stubs before you get it? 

Like I said we've all been there. This is just on a massive scale. It looks like you funded the entire job yourself? We care contractors, not banks. You suppliers aren't banks either, as you are most likely soon to find out.


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## Ptshaff559 (Mar 23, 2013)

The house I worked on is in Massachusetts I have everything from her saying not to worry I would be paid to her asking me to do additional work


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## CopperSmith (May 1, 2010)

Wow. I would say be reasonable, realize that you made some serious mistakes here by getting this far into it. As the contractor, it is your responsibility to your homeowner and the subs to keep control of the finances of a project. When the money stops, you stop. 

Now its too late for that. You need to stop all work, get to a lawyer with all correspondents, have personal conversations with your subcontractors, and go after the money that is owed to you. Not just the amount you spent, but the full contract price agreed plus attorney fees and interest. -- Get a good lawyer.


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## BlueRidgeGreen (Apr 21, 2012)

Don't mean to pile it on....but i would never let my ass hang in the breeze to the tune of more than 7.5% (and that's small contracts).....NEVER, not even with my own mother.

I find that it is one of those fundamental things; good contracts and payment schedules make for good relationships.

That being said, I could DEFINITELY see how you could let that slip with such a long term and solid client.

Sorry to hear it. Time for the courts to take over. It will probably take a while and cost a bit, but it sounds like you have your bases covered at least....i hope. 

Best of luck.


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## CA & AZ Builder (Dec 22, 2009)

I'm interested if there are any updates on this?


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## nelson.peter (Apr 7, 2013)

What a scary story.

We are a property management company that also does turnovers, remodels, and repairs. We are a fairly new company and will be getting ready to start work on our biggest contract to date. It isn't all that large by y'all's standards (~$75K), but like I said, we are only a little over a year in business. 

My question is this: is there a good place to go to get a construction contract (that maybe also deals with a payment schedule)? We are located in Seattle. We have our management agreement, but with a job this size it seems a construction contract would be a little tighter. 

I sure don't want to get caught out in the rain (get it -- Seattle?!!) on this job. Thanks.


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## KAP (Feb 19, 2011)

nelson.peter said:


> What a scary story.
> 
> We are a property management company that also does turnovers, remodels, and repairs. We are a fairly new company and will be getting ready to start work on our biggest contract to date. It isn't all that large by y'all's standards (~$75K), but like I said, we are only a little over a year in business.
> 
> ...


You are getting ready to start work on your biggest contract to date, but are NOW looking for a contract?

Looks like history repeating itself in one thread...


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## SDel Prete (Jan 8, 2012)

KAP said:


> You are getting ready to start work on your biggest contract to date, but are NOW looking for a contract?


Amazing isn't it?


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## nelson.peter (Apr 7, 2013)

Up to this point it has been relatively small stuff -- $10-25K. I have been comfortable with our management agreement. But this $75K (est.) job represents a significant step up so I am thinking a standard construction contract to tighten things up a bit would be in order.

And yeah, why not now? I am thinking about the contract _before _the job starts. Is that so terrible? We are still 3-4 weeks minimum from starting in. I have a management agreement to back me up if nothing ever gets done with a construction contract. 

I am not seeing anything wrong....unless it takes longer than 3-4 weeks to put together a construction contract.


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