# advice for issues with collecting final payment



## fge (Sep 8, 2008)

So I have had this issue with collecting a final payment. It is from a high end builder who is building 3/4 million dollar homes. He does not seem to be broke or anything that I can tell. We completed the final punch list at the end of April. He paid us but held a 20% retainer fee which totals just a bit less than 5,000.00. It is a large amount of money for us. It hurts just knowing this money is owed to us.

So I have emailed him the final invoice 3 times. My wife called him last friday and he advised her that he was in his office and would work on getting the final payment sent to us that day, which was 7 days ago. I don't have an attorney but have considered getting an attorney to send the builder a letter requesting payment. I have not dropped by his office yet, but have considered doing just that. I am not a very confrontational kind of guy though so before a face to face meeting happens, I will need to be confident in what my exact rights are so that I can speak intelligently.

As far as I know there are no issues on the job. I have several photographs documenting this job, in fact it is one of the best jobs we have ever completed. It turned out extremely beautiful so it is hard to fathom someone ripping us off on this job. Both the builder and his Project Manager advised me everything has checked out good.

I typically do not run into this issue. Most of the time customers will pay out when the job is finished. Most of our jobs are with owner builders or owners who are remodeling so I am typically dealing with an owner.

Not sure if there are any good words of wisdom here. I am going to consult an attorney.


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## Charlie5791 (Feb 21, 2012)

What your rights are should be spelled out in the contract. You spell out the exact scope of work and you also spell out payment schedules. If he's beyond the contract for final payment, you are well within your rights to go pay him a visit and just tell him you were in the area and thought you'd stop by to see if any problems have come up that you weren't aware of.


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## Loren (May 30, 2008)

When you are dealing with this sort of higher-end client
they may string you along for accounting and tax reasons…
assuming they aren't out to cheat you.

There are books with polite collection letters in them
and I suggest you consult one or two to see if you
can find something that has a friendly/firm tone 
you can adapt to your cause.


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## donwilwol (May 16, 2011)

it should also be in writing that after 30 days you have a right to charge interest. I know it doesn't help, but sometime additional fees forces payment. I worked for guys like that. It seemed the more money they had, the harder it was to get it.


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## HillbillyShooter (Feb 15, 2012)

Check out your state's mechanic lien laws and don't let them expire-some high rollers are notorious for cheating their subs out of small amounts of money-not enough to make it economically feasible to hire an attorney but enough to rob the sub of his profit. I know you hate to loose jobs in this economy, but my opinion is that its worse to do the job and loose your profit while just contributing to that high roller's bank account.


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## Buckethead (Apr 14, 2013)

Got to the mattresses.


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## Dal300 (Aug 4, 2011)

Hmmm, I'm not sure where you live but go into the building you installed the cabinets in and uninstall them. 
I would bet that within 30 minutes you will have a contractor on site and a few minutes after that you'll have a check (Although I would demand cash).


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## Boatman53 (May 21, 2012)

That is why I will never work for a contractor again, except for one. He was/is a customer of mine in the boating world and needs me for his boat so we already have that relationship. Anybody else, no. If they really need my skills I will only work for the owner. Good luck.
Jim


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## jimmyb (Mar 21, 2013)

I agree, a mechanic's is your strongest weapon.


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## Makarov (Jun 16, 2013)

Small claims court get judgment then take his tools if he doesn't pay you. No lawyers just you him and the judge. 10000 limit in TX.


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## fge (Sep 8, 2008)

Thanks guys. I do need to do something quick as I am starting to wonder. I think I am going to seek the advice of an attorney as I think a letter from an attorney would not cost too much but could be a little more forceful than I am. Probably stopping by to see if there may be any problems would also work fine.

My thinking though, if he had issues with anything in the cabinet job, he has had ample opportunity to bring it to my attention and there is really no issue in a cabinet project of this magnitude that could possibly be valued at nearly 5,000.00 or justify withholding nearly 5,000.00.


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## fge (Sep 8, 2008)

Dallas, I am in San Antonio. One other thing, which should not matter really. The builder sold his model home. Then the home we did the cabinet job on, the builder leased that home from the actual owner in order to use as his new model home. So now his actual model home has our cabinets inside. I heard he is currently building another model home to move into when his current lease expires. So removing the cabinets will cause a big scene and probably could get me arrested. I don't know. But I know I would love to go and get my cabinets. However there is some heavy granite on them. I could get the upper cabinets.


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## fge (Sep 8, 2008)

I just checked, the Texas Mechanic's Lien expires in 4 years. That is really good to know. Thanks for that info.


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## Tim457 (Jan 11, 2013)

It could be for lots of reasons, but it's highly likely Loren is right. Pretty much all big companies do this to whatever smaller companies they can get away with doing it to. The longer they avoid paying out money the less interest, fees, etc they pay and the more money they have to earn money with. So find your leverage points and use them. Small claims/mechanics liens are powerful but keep them in your back pocket. You could talk to other contractors that have worked with them to see if they do it to everyone and if they eventually pay. If so, leverage harder.


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## Dal300 (Aug 4, 2011)

Jerry, I haven't done it in Texas, although I live here, but call the county sheriff and have them send a deputy with you.
You own that product, not the contractor.


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## fge (Sep 8, 2008)

Thanks for the info guys.


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## RonInOhio (Jul 23, 2010)

I agree with Tim. Ripping off small guys is a very common practice. These contractors are always trying to find ways
to come in close to their bids to keep customers happy.

And anyway they can save a buck is fair game. Even at your expense. This practice isn't limited to contractors. It goes on in almost every business.

Don't let this slide. Just know your rights and approach things the right (legal) way.


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## Stephenw (Nov 14, 2011)

I'm not a contractor and I didn't stay at a Holiday Inn last night…

I have heard of subcontractors placing a lien on a house and sending a copy to the general contractor in order to get paid.


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## HillbillyShooter (Feb 15, 2012)

The problem is not how long before the mechanics lien expires, but rather you need to find out how long you have to file the lien after the last work was done or materials supplied-usually a matter of months.


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## fge (Sep 8, 2008)

Yeah, I think I mis read it. Reading further into it I find that 4 months is the expiration date. So I am still within that time period. I just need to go and file the lien, but first I want to speak with an attorney. I just hope we get paid.


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## fge (Sep 8, 2008)

We completed the final punch list the very end of April. However, the second week of May the project manager called advising me that our bid included appliance panels, which I don't think it did, but instead of arguing that our contract did not include any appliance panels, I felt it was easier to just build them and install them. So actually I was last on the job site installing appliance panels the 3rd week of May. And since this is just the first week of July I believe I am well within time limits for a mechanic's lien. I am going to consult an attorney first thing on Monday.


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## gfadvm (Jan 13, 2011)

Jerry, I would go for a personal face to face before I spent money with an atty. You don't have to get ugly/confrontational just act like you are not leaving without the check.

Or have uncle Guido pay him a visit!


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## fge (Sep 8, 2008)

gfadvm, I like that idea also. I should just pay him a visit on Monday. Then if no success, pay the attorney a visit on Tuesday. I think he knows my personality is more of a laid back type and I wonder if he just wants to see if he can take advantage of us. He might be miscalculating me as I will not just over look the debt. I do plan to be tactful and will act within the limitations of the law. But I will pursue him more aggressively than I have so far.


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## waho6o9 (May 6, 2011)

Why waste the time?

A letter from an attorney with the intent to file a Lien and intent to perfect the Lien
will do more than "talking".

He knows what's up and he's playing you.


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## TopamaxSurvivor (May 2, 2008)

He is obviously a real business man. Business is about screwing everyone you can out of everything you can, or at least using their capital as long as possible. If you are going to play in the big guy's court, you are expected to take it on the chin like any good team player will.

I would file the lien ASAP! Make sure you did not have to file notices that have expired time limits. He would be the first guy on my do not work for list. He would not get an second chance to lie about paying today. My policy was always I could go bankrupt faster working for free than sitting in the shade drinking beer all day.


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## cabmaker (Sep 16, 2010)

Jerry,

You can go to your nearest courthouse in the appropriate jurisdiction and file a mechanic and material mans lien on your own ,

You ,based on what I have just read come to the wrong place for your question.

I wouldn't advise going to the property and removing anything as that would immediately change the direction of your case.

I sweet letter of intent would be meaningless to this fellow.

The notion that it is based solely on his accounting practices is absurd. I can assure you that this is not his first time to do this.

Being in the upscale building business is no assurance at all that this guy practices sound business practices.

He very likely has less coin in his pocket than yourself, therein is the danger !

File a lien soon. Contact the prospective buyer of the property if your privy to that information and let them know what has happened.

Contact other subs involved to see what sort of dealings they have had. You may find that he owes quite a lot of money.

PM his DBA to me if you will. I know a few high dollars in your area .But I'm sure he s just a wannabe.

JB


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## RonInOhio (Jul 23, 2010)

My money says he gives you the run around again. I wouldn't accept an answer like , " I'll send the check out tomorrow".

He has already lied to you on several occassions.

Anyway,good luck. Hope you are successful in getting paid.

Keep us informed. Its all kind of interesting.


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## AlaskaGuy (Jan 29, 2012)

In my state once something is attached to the building, like carpet cabinets it is illegal to remove them for non-payment. I'm sure this is the case in many states.


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## KayBee (Jul 6, 2009)

I've known a few cabinetmakers and trim carpenters that built that final payment into the rest of the contract. That way, when they got stiffed for the final payment, well they already had the money. If they get the money, it's like an extra Christmas. So, it's the way a lot of people do business.


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## fge (Sep 8, 2008)

that would mean charging 20% more. not a bad idea if i could make that sale.


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## a1Jim (Aug 9, 2008)

Lots of good Ideas, a strong contract with getting paid ahead of the contractor so that a check is in hand before final installation works best. I agree with getting a lien on the property and filing a small claims against him and the owner,this way he has two people on his case. 
I had a friend who had a similar problem and after weeks of trying to get paid *some how*all the doors disappeared off the job 30 in all. When the contractor asked where they doors had gone my friend said he didn't know but that he could make new doors and match the stain perfectly for about $ 800 more than what was owed,of course it required cash when the contractor came to get the doors, Some how (wink wink) my friend had the doors ready in only 2 days finish and all.)


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## Tim457 (Jan 11, 2013)

Any attorney will tell you to go talk to the contractor and try to settle it before escalating it to legal channels, because it often works. A good one will tell you that for free, and a bad one will charge you for that advice too. If you don't walk out with a check then go see the attorney and/or file the lien. He's probably pushing you to see how far you'll let it go, but don't waste your money if you don't have to. Checking in with an attorney on the right way to file the lien should be pretty cheap though. Ask first how they charge.

This isn't just something contractors do, it's common practice in fortune 500 companies to have a 90 or 180 day or more wait policy before paying accounts payable. The longer the better for them and they push it more with smaller companies they owe. This guy probably has a number in mind that he's waiting for or he's waiting until it's too late for you to file a lien. Hard to say which but the more you let him know you're serious the more chance you have of getting paid. You'll probably get more respect too.


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## fge (Sep 8, 2008)

Yes, I hope the reasons are innocent. But I believe the construction loan closed in May, so would assume the builder has been paid out by the bank.


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## Grandpa (Jan 28, 2011)

Small Claims Court. You have a contract and can prove they owe you so you will be able to get your money. All it costs is the filing.


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## devann (Jan 11, 2011)

Go ahead and file the lien Jerry. And if I have had to file a lien against a contractor/ property owner in the past but I still thought that I would do business with them, I would file a lien up front, after the contract was signed. It's a nice way of letting them know how much you thought they appreciated doing business with you the first time. It's worked for me so far.


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## Tennessee (Jul 8, 2011)

Jerry: I sell for a mechanical contractor, and one of my other duties for the MC is to take care of really late payments. 
Here's the deal - forget the attorney, you don't need one right away.
As long as you have completed your punch list, what is happening is you are the victim of a builder who tried to cut his profit a little thin, and now is just not paying out to some of his subs in the hope that they will just go away and write it off. Seen it a lot of times.

Here's the process:
First, go to your county courthouse, or the county where the house sits, and file a lien against the house and the builder. In my state, Tennessee, this is about $12 depending on county. Also, find out how long the liens are good for. In the two major Tennessee counties where we do most of our business, one county is only one month, another is 12 months. (The length the lien is in effect). When we do business in the state of Georgia, we were happy to find out that liens are forever, until we remove them. This means as soon as he sells the house, the bank has to pay your monies because the bank will do due diligence on any liens, and yours will pop in the state computers.
If you do not have an interest charge listed on your initial contract, you cannot add it after the fact. We learned this the hard way, and now have a suitable interest charge for non-payment after a certain date on all of our contracts. So far, it has kicked in once, and boy, was that guy pissed but we got our money.
After you make sure the lien is filed within the proper time period, (these things do have limits, depending on where you are in the food chain, and subs do have a clock on them), then you have to sue.
You can do this usually with a one page form available at the same courthouse you got the lien at. I've done it a number of times, and it usually takes a one paragraph statement on the form, with some legal stuff that is not hard at all. Example: When we sued a guy over a hotel in Georgia, the county constable delivers the lawsuit. (The lien was in place, but he had no intention of selling the hotel, so that was not of much use.) Usually this delivery is enough to make them pay right away, and the Georgia guy sent a check the day he got served by a person with a badge. But one guy resisted us in Hamilton County, Tennessee, and we had to go to court.
Still no attorney to this point. 
When we showed for the court date, there are attorneys who just hang out at the courthouse waiting for business. They specialize in small stuff like this, and always have fixed rates. We got a guy to do it for $300, and we went in. Obviously the builder was not there even though we was served, and we won.
When he got the judgement in the mail, he tried like hell to get us to accept the $6000 plus interest he owed us, but at that point we had turned it over to that attorney, who added 20% to the total for a total of $7200 plus interest, now about $8000. He squealed like a stuck pig, but we got our check.
I've done this a number of times for my company, it will happen, and if the work was done, and the punch list is complete and finished, you WILL win.
Good luck, and welcome to the new world!
By the way, we kept that initial attorney. We never talk to him so we don't get charged, and if we have a late payment, we still do the lien and lawsuit ourselves, and only give it over to him before the court date so he does the appearance and we can keep working. He gets his cut, we get our checks.

Paul


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## whitebeast88 (May 27, 2012)

i deal with the public everyday in my job,sometimes i have to collect over due balances.i've called people and get the same i'll mail it blah,blah,blah.it has always worked for me to show up and talk face to face.i'm not confrontational either but i like to deal good or bad face to face.then if that don't work you can put a lien on the property.i'd add late fees to the bill each time i sent one to him.hope you resolve it without to much more problems.


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## fge (Sep 8, 2008)

Thanks guys, well Moday should be telling. I think I will go to his office in the morning. If no check then next stop is the court house to complete paper work for the lien and also small claims court. Hopefully a quick consult with a local attorney before I begin my day. Thanks everyone.


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## waho6o9 (May 6, 2011)

Good call Jerry.


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## BillWhite (Jul 23, 2007)

Uh, once the cabs are installed, they can't be legally removed as they have become "part of the property". A lien won't necessarily insure prompt payment, but will preclude a clean future sale of the home. At least that's they way it is here in MS.
I'd lawyer up in a heartbeat.
Bill


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## JJohnston (May 22, 2009)

Keep us posted - we'll all want to know how this turns out.


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## Makarov (Jun 16, 2013)

Problem with a lien in this case is the contractor doesn't own the house. He is leasing it back from the home owner. (probably to keep from paying liens) I have a friend who owned a band, they played at a bar, the owner refused to pay them. She went to small claims court, got a judgement. He still did not pay them. On a Saturday about 11 PM she showed up at the bar with a sheriffs deputy and cleaned out the till.

I would call him today, and leave a message that If you do not have a check in hand by 2 PM Monday you are going to have to file in small claims court Monday afternoon. The reason I say 2 pm is it gives you time to do the paperwork for a small claims case or go to the bank and cash his check. (make sure you cash it at his bank, don't deposit it at yours) be polite, be nice but point out that your a small business and can't afford to not be paid in a timely manor. Small claims is a do it yourself thing, just you and him and the contract.

Make sure when you file the paperwork it names him and his company.


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## huff (May 28, 2009)

Jerry,

Once you decide on a plan of action, make sure you follow through to the letter. I agree with setting even the time of day this matter has to be settled.

But whatever you do, you have to do exactly what you said you where going to do or it won't mean a thing.

*He's ripping you off; you know it and he knows it.*

Whatever your legal rights are, follow them to the letter!

A judgement or a lien can take forever to settle. I would also file a complaint with the Better Business Bureau.
He will get notified by the Better Business Bureau and if it doesn't get resolved, it stays on his record until it is with the BBB.

Also you can notify other sub-contractors to let them know how he works, but don't be surprised that you aren't the only one he's trying to screw out of some money.

You can damage his reputation just as easy as an unhappy customer can hurt your reputation.


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## CharlieM1958 (Nov 7, 2006)

I agree with Makarov that a lien might not work much magic in this case since the house has already been sold. I would go with a friendly face-to-face meeting first. Depending on how that goes, you might give him a deadline and tell him after that you are going to small claims court.

Aside from contractors frequently stringing their subs along on purpose, or blatantly trying to rip them off, there is another explanation I've seen far too many times. Many contractors (even huge ones) do not keep enough working capital to run their business properly. They are constantly robbing Peter to pay Paul by taking the money they are paid from one job and sinking it into their next venture before all the subs have even been paid in full. Then they have to wait for the next payment to come in from someone else in order to pay off the subs from that previous job. It's not the right way to operate, but I see it all the time.


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## ClintSearl (Dec 8, 2011)

Send Vinny.


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## JJohnston (May 22, 2009)

Just for the record, courts and lawyers call that "pay when paid", and the courts have ruled that is isn't a legitimate excuse.


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## JJohnston (May 22, 2009)

^ That isn't likely to work. I had a contractor abandon a job partway through, then demand additional money to finish, because he said his costs had gone up (not to mention any names, but his name is Charles Montoya / Rock Creations in Bernalillo, NM). I contacted my state contractor's board, and they said they don't get involved in contract abandonment issues, and in fact, don't get involved at all until you get a judgment in the courts.


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## a1Jim (Aug 9, 2008)

JJ in Oregon you wouldn't have a problem,the courts here require you to have a arbitration through the builders board before proceeding through the courts. Having family in Texas it seems that it's not even necessary to have a contractors licence in Texas so I would guess they don't have a contractors board.


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## Pono (Mar 10, 2012)

I would call and say you coming for final payment.Go to the office and wait until he pays you dont leave till you get payment.If they refuse give them a bill with a late fee if you think he is never going to pay remove what you did.If you are liscened put a lien on the house.I have had this problem with highend customers and as a result will never work with a contractor again.I actually had to bring in my bobcat once park it outside the guys kitchen and threaten to demo the house to get my products back.I dont recommend that but it is hard watching people that are really well off not pay theyre bills.And most contractors I have met could care less about paying or respecting others in the business majority are con men.


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## TopamaxSurvivor (May 2, 2008)

The home owner is not going to like having a lien against his property. The builder probably had to be provide a lien release sating all subs had been paid at the sale closing. Not sure how is it with small builders, but i have had some success with the mere mention of notice of intent to lien the property of some of the world's largest largest corporations . Nobody in the sub chains wants to be the cause of that one ;-))


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## 1thumb (Jun 30, 2012)

I'm in the middle of a similar issue regarding approx. $1,000.00 owed to me by a contractor that I subbed work from. I'm knocking on the homeowner's door on Monday, explain the situation and tell him that I have no option but to lien his property. I'm hoping he will contact the contractor and aid in collecting the money owed


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## Hammerthumb (Dec 28, 2012)

Withholding retention is normal for most contractors on large projects. I assume that it is his contract and not yours as you would know what the payment schedule is in your own contract. If you used a contract that was written by the general contractor, there should be a section in the contract about retention payment. As someone stated above, be aware of your states lien rights. State of Nevada is 90 days from the last date of labor performed. I will always execute a lien the week before the lien rights expires no matter what I am promised. Usually the retention is not held up by the contractor, but by the owner, as the contractor is also waiting for his final payment. The mechanics lien is one of the recourses a contractor and subcontractor has to assure he gets paid. I once did a job for a school district and the retention payment was held up 2 years. This was because of issues on the jobsite that had nothing to do with my trade, but final payment from the district to the general contractor was held up in arbitration until those issues were resolved. It did not make me happy when that happened, but I did finally receive my final payment.


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## devann (Jan 11, 2011)

*a1 Jim*, you do have to have a contractors license in Texas if you want to get a building permit. The loop hole is if you are the homeowner and you are homesteading the property where the permit is issued then you can get a building permit without a contractors license. A sub-contractor doesn't need a license to work for a general contractor.


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## a1Jim (Aug 9, 2008)

Thanks for the update Darrell,some 10 years ago my parents wanted to build an addition and I tried to confirm the local "contractor's" claim that he did not need a licence nor did he need a permit because Texas did not require either. When I called the county they told me the same thing.


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## fge (Sep 8, 2008)

I have been following all the responses, I took my family to 6 flags today and I think my girls want to close out the park B-)

There could be a hold up on the retention for one reason or another that I am not aware of. The only thing that causes doubt in my mind is that the builder has not communicated that to me. Rather he just leads me to believe the payment is in process or being mailed. If there were issuesit would be really easy for him to just communicate that to me.


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## JJohnston (May 22, 2009)

This has nothing to do with anything, but I've been to the Six Flags in San Antonio. It's a beautiful place - very inspired way to reuse an old quarry.


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## fge (Sep 8, 2008)

Yeah, we had a lot of fun. My little ones are 7 and 5 year olds. They get the most out of the water park. We did not go at all last year but this year we hope to make a few trips there. It is a very nice park.


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## TopamaxSurvivor (May 2, 2008)

Jerry, I just had a thought about being sure you have met all the requirement of notices and timing for the lien. There is a possibility of a suit being filed for slander of title.


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## fge (Sep 8, 2008)

I will have to find out all the requirements.


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## Earlextech (Jan 13, 2011)

Check out your state's mechanic lien laws.
This does not insure quick payment but imagine the closing table when the millionaire homeowner is told there is already a lien on the house, he'll make sure it gets paid!


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## reedwood (Jan 27, 2011)

Lots of good advice - except for "Bobcat Joe".

My gut tells me you'll get paid with an apology for late payment, maybe even a set of drawings to bid on next.

One thing I've learned is the long term effect of a burning bridge, even if you don't plan on crossing it again.

That, and the squeaky wheel gets the grease. Just be nice…...am I right?


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## fge (Sep 8, 2008)

A quick update. I had emailed my sister, she has a different last name as I so no one would know her to be my sister. I actually BCC her on my most recent email I sent to the builder requesting final payment. My mother had been encouraging me to allow Jamie (sister) to assist since she works with a very prominent law firm. I wished she would have notified me first before any actions, but she sent me a professional email and CC the builder advising me that 'X, Y and Z Attorneys at Law would be happy to assist in the collection of monies owed to your business.' The email requested past due invoices along with other pertinent information and then she concluded with "Rest assured you are in confident hands."

So I have been rather unsuccessful at even getting a response out of the builder as he would mainly just ignore my emails. This morning I awoke to an email the builder sent at 6:30 a.m. He advised that he was sending the payment out on Wednesday. He made it clear that he was not happy in the tone of the email. He indicated that he will no longer do any business with us in the future. I responded to his email, now getting more demanding as I instructed that if payment is not received in our office by 2 p.m. on Friday I will allow the Attorney to commence the collection process. I did inform him that simple communication is really what I was looking for from him.

I do think I will still look into filing a mechanic's lien and Small Claims court proceedings. I can always cancel or dismiss court proceedings and the lien in the event that he pays us.

Well, I will update whenever I get paid. Maybe this way, some of us can learn from fellow LJ school of hard knocks.


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## fge (Sep 8, 2008)

Mark, I don't like burning bridges neither, but it seems the builder is not interested in future business with us. I did my best in the job and the builder seems to now feel offended or upset for one reason or another. My goal is to make everyone happy, I guess it just does not always work out that way.


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## fge (Sep 8, 2008)

I wanted to provide a quick story of a similar situation I found myself in earlier this year that actually turned out good. I worked for an owner builder who paid timely throughout except at the end of the job. I could tell he was generally a good guy and meant well. But at the end of the job he was unable to pay the final invoice which was right at 5,000.00. Again a substantial amount of money. Again I grew concerned but I stayed after him making attempts at communicating with him every 3 or 4 days through voice calls, text and email. I never got to the point of hunting him down physically. He would tell me that he was coming by with the check but then cancel at the last minute. He was also remaining in communication with me for the most part. Eventually he paid us 4,000.00 and at that time explained that he and his wife had hoped to build with cash but they began to run low on cash. Then later he and I worked out a deal for us to utilize his backhoe to cover the balance of his invoice. That might not have been the ideal situation for us, ideally we just like to get paid when the job is finished. But in the end that customer paid and was very happy with their custom cabinets.


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## fredj (Jun 4, 2013)

A dead beat is a dead beat ! Always make sure you have a lien in your contract, and if you can in your state, charge interest. I knew a remodeler who always did that and made a fair bit of extra money on the resale of any house where the owner stiffed him, but unlike many people, he could afford to wait. As for taking the cabinets back out, I think in many states, once they are attached to the walls or floor, they are part of the house and you are breaking the law removing them. 
My rule is the get half up front, then the rest before shipping or installing. So far no one has complained over that, and it has always been done over a handshake. Might be a good idea to get a lawyer to write up a template for a contract that's boiler plate strong on any issues you may face.


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## Blackie_ (Jul 10, 2011)

Jerry, what ever you do I'd move quick, there's limitations and you don't want them to expire and I'm assuming it's the same as what John, C. stated, one other thing you can do is give him a bad report via better business and Yelp, this won't get your monies back but it will make others beware.


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## JoeinGa (Nov 26, 2012)

*"He indicated that he will no longer do any business with us in the future."*

I've followed this post from the beginning, wondering how it would turn out. (Just being NOSEY really  And reading this line in your note makes me think that you probably wouldn't want to do business with him in the future either.


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## Vrtigo1 (Mar 18, 2010)

I'm sure it's already been said, but from a business standpoint, your best bet in any transaction is having a strong contract signed before any work begins. The contract should state in black and white exactly what materials and services you will provide as well as what if anything is not included in the price. It should also state when and how payment(s) are to be made, the amounts, and what happens if payments are not made on time. I.E. if a payment is late, a late fee may apply, and if a payment is 30 days late then interest will be charged. The contract should also state that all materials belong to you until the contract is 100% paid and it should talk about what remedies you have should you not be paid, i.e. you should specifically put in the contract that you will uninstall the cabinets and charge a fee for that if you aren't paid within a certain timeframe.

The contract really needs to address all possible outcomes so everything is there in black and white up front and you aren't left trying to work out a deal at the end of the job. Hire a lawyer to draft a contract for you, that way you can get it exactly how you want it. It will cost you some money up front but you should be able to reuse the contract for every job.

Also, just my two cents so feel free to ignore it, but I kind of question your intent of talking to a lawyer before having a face to face discussion with the guy that owed you money. 95% of the time you can avoid problems just by establishing clear two way communication so neither party is left trying to guess what the other is thinking. That is one sure way to hurt feelings and ruined relationships.


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## fge (Sep 8, 2008)

Thanks Joe, I agree we are better if we do not work with this builder in the future. There are several builders in and around the San Antonio area so I am fairly certain we will find more credible / responsible builders.

Vrtigo1, I definitely agree with getting a stronger contract drawn up by an Attorney covering all issues. This is a lesson learned for sure.


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## MarkSr (Oct 14, 2012)

Jerry check your contract, does it in fact call for a 20% retainage? If it does it also has a date for the retainage to be paid by. If not take a copy of the contract with you and a couple of guys and go to the house. Once your there *and in the house*, tell the contractor you are taking back the cabinets if you do not get the cash. He will probably say he will call the cops. Let him call them, by the time the cops get there you will have two, three or more cabinets off the wall and when the cops get there, they will tell you to stop dismanteling any more cabinets. They will not arrest you because it is a civil matter and they will not get involved. Just take the ones you got down before they got there and I guarantee you will have your money the next day. You will have to put back the cabinets again, (I hate doing things twice) but it works.

It's good that you are not confrontational, and make sure the guys with you stay the same. If when you start to take the cabinets down and the contractor grabs you or your guys or physically pushs you, do not retalliate, because when the cops get there, you now have a right to have him arrested for ashault.

I don't know if all i just told you is law, but I know for a fact it works, through personal experience, I showed the cops my contract which did not have a retainage clause, it was payment upon completion. The cops asked why he did not pay me and he came up with some lame excluse but agreed to pay me with a check and I said no, I wanted cash. The cops told me to take the check and if he stopped payment or it bounced you had a better case, (now this was in Florida).

By the way, unless you have a friend that is a lawyer that letter you want will probably cost you about $200-$300. And I would say that is pretty much the norm for Demand for Payment Letter from a repetable attorney.

Good Luck Buddy hope all ends well and quick.


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## reedwood (Jan 27, 2011)

Wait…...

You can't just "go with a couple of guys to his house" and start tearing stuff out unless you want to get arrested like OJ.

Speaking in general, if the paperwork and work is done properly in the first place you won't have this problem - the Law is on your side.

That's the problem with the construction business, maybe others, everyone is quick to assume things and start making demands - or else. Or else what?

You going to beat them up? Are you going to destroy your work? Rush to hire a lawyer and spend hundreds of dollars for a stupid letter, thousands if he takes them to court….. Really?

Nobody wins 100% in court but the lawyers.

If you look back at every job you can pin point things that turned the job one way or the other. There are signs everywhere. Review and adjust accordingly.

It's a chess game folks - not a personal thing. Play the game well.

Ps. - 38 yrs. as a high end remodeler/ cabinet shop - never been sued or not paid.


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## Loren (May 30, 2008)

One simple way to cover for situations like this is to 
stick with the 50-40-10 payment schedule on any 
job involving delivery and installation over a 
certain amount.

Now, if you won't release the casework until you
get your 40% (on client inspection), have storage
written into your contract so if you need to get the
boxes out of the shop and into a rented storage
unit. Clients who aren't paying for storage can be 
very blasse about starting and stopping jobs in 
progress because of their own cash flow issues 
without a thought for your "space flow" issues.

Some may even suggest "oh why don't you bring
them down and put them in my garage while we're
waiting on the floors?"

That's a kneeslapper, eh?

Get your 40% - that way you're paid up front for
(usually) about half of the install and if they want
to stuff you out of 10% or do some moron move
like having their contractor put the cabinets in 
it's a manageable loss.

I really hope you get paid.


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## bomisore (Jun 27, 2010)

If you have lathe turn a bat or mallet and demonstrate to him/her that you know how to use it.


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## Sandblastguy (Aug 14, 2012)

I have had these people to deal with and I have found collection agents are a great thing. They take a small percentage if and only if they collect and you don't have to deal with the guy at all. The guys that I use are very intimidating and I would not want these guys phoning me. I think it is well worth the expense to not have to deal with these people. Good luck


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## fge (Sep 8, 2008)

I like your thought Ben. I might tell the guy if he is in need of motivation I can turn a bat out of hickory just for him.

Sandblastguy, I like the idea of turning it over to debt collectors. No one wants to deal with those guys.

I agree also that I need to pay an attorney to draw up a very good contract that can cover all these issues.


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## AlaskaGuy (Jan 29, 2012)

Sandblastguy said

I have had these people to deal with and I have found collection agents are a great thing. They take a small percentage if and only if they collect and you don't have to deal with the guy at all. The guys that I use are very intimidating and I would not want these guys phoning me. I think it is well worth the expense to not have to deal with these people. Good luck

I assume you haven't heard about the "Fair Debt Collection Practices Act". Collecting people who use intimidating tactics can get into a lot of trouble.
.
.
.
Prohibited conduct

The Act prohibits certain types of "abusive and deceptive" conduct when attempting to collect debts, including the following:

Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time8
Failure to cease communication upon request: communicating with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted9
Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number.[10]
Communicating with consumers at their place of employment after having been advised that this is unacceptable or prohibited by the employer11
Contacting consumer known to be represented by an attorney12
Communicating with consumer after request for validation has been made: communicating with the consumer or the pursuing collection efforts by the debt collector after receipt of a consumer's written request for verification of a debt made within the 30 day validation period (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor's name and address13
Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector's misrepresentation that he or she is an attorney or law enforcement officer14
Publishing the consumer's name or address on a "bad debt" list15
Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law16
Threatening arrest or legal action that is either not permitted or not actually contemplated14
Abusive or profane language used in the course of communication related to the debt10
Communication with third parties: revealing or discussing the nature of debts with third parties (other than the consumer's spouse or attorney)[17] (Collection agencies are allowed to contact neighbors or co-workers but only to obtain location information;[18] disreputable agencies often harass debtors with a "block party" or "office party" where they contact multiple neighbors or co-workers telling them they need to reach the debtor on an urgent matter.[19])
Contact by embarrassing media, such as communicating with a consumer regarding a debt by post card, or using any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business20[21]
Reporting false information on a consumer's credit report or threatening to do so in the process of collection22


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## TopamaxSurvivor (May 2, 2008)

Some of the tactics suggested are definitely not socially acceptable (read as illegal.) Too bad the scumbags have a definite advantage ;-((

Another things to watch is the general conditions of any specs when you bid a job. Most estimators never read specs. It takes too long ;-) Not sure if you would run into this in residential wood working, but once found 100% performance bond and 50% retention in a set of specs. Needless to say, I declined to bid the job at any price.


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## fge (Sep 8, 2008)

The contractor paid but withheld 1,000.00. Well, I am not sure if I will ever press him on that remaining amount.

He seemed to act upset in his last email to me as I believe he felt the pressure I was beginning to apply to get him to pay the final payment.

So he withheld the 1,000 because we left 38" opening for his stove. His stove for the home is 36". But his architectural drawings I utilized to build his job specified a 38" opening for the stove. So I utilized that dimension on his drawings. I did know the model number of his stove but I did what was on the architectural drawings, because, lets say I decided to allow just 36 1/4" opening for his 36" stove, and he later came to me and stated his drawings indicated a 38" opening and he had a technical reason for having that opening regardless of the 36" stove, then he could have forced me to reduce the size of my cabinets (which is a pain to do). So I went with the architectural drawings and allowed for 38". He did later request that we add a 7/8" filler on both sides to make the opening 36 1/4". His granite contractor did follow my cabinets (I guess that guy does not look at drawings or specs). So after I put the small 7/8" filler strips, the granite contractor replaced 1 section of granite about 5' long. The contractor never held any conversation with me that indicated any charge back fees or anything. He just sent the final payment minus the 1,000 and listed the reason for the withheld money.

So, in the end, not only do I feel his communication skills greatly lacked and his integrity lacked as he routinely indicated payment was in process when in fact it was not, but his inability to speak with me face to face or even prior to final payment regarding any penalties he had planned on assessing was cowardly.

I am not sure how to feel about the whole issue with me allowing for 38" opening for the stove based on his drawing. But I can say that none of us are perfect. The contractor himself had placed the 34 1/2" tall island wall 10" to far to the right, causing the island to be off center to the lights that hung above. So during the job, he requested I move the island to center under the lights (they were not hung when we installed the cabinets). Not only did I do that within 48 hours of our conversation, but I also had to remove 10" of his wall completely due to the fact it was located in the wrong place. I point this out because this was his error, we corrected his error, corrected his half wall and just to be nice I* did not charge him for this error* caused by wrong placement of his framed wall. In fact, the wall was completely unnecessary.

Also, I built him 5 appliance panels for his appliances that I never included in my bid. Sometimes I am just too nice, then you get burned. I should have charged him for those appliance panels.


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## waho6o9 (May 6, 2011)

Thanks for the update Jerry.


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## fge (Sep 8, 2008)

So to sum it up. If nothing else I spent 1,000.00 on some great learning opportunities. Consider myself properly educated in some business lessons, or lashings. I am getting an attorney to draw up a very thorough contract that covers ever potential situation and will utilize the contract with all of my jobs to ensure full payment is received.

I am just glad I did not get stuck with close to 5,000.00 in bad money owed.


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## Hammerthumb (Dec 28, 2012)

You were right to make the cabinets per the drawings with the 38 inch opening as your responsibility is the cabinets and not the appliances. I would have charged him for the fillers and for the work on the island as you built it per the drawings. When a GC asks me to do something that deviates from the drawings, I request a ASI from the architect before proceeding. Without documentation of field changes, you obligate yourself to make corrections at your own expense. Never trust the word of the GC without documentation. By the way, I'm sure the countertop contractor got paid for the additional work as their tops do not come out of the drawing dimensions, but from templates made in the field from your cabinets. This is standard to trade.


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## fge (Sep 8, 2008)

Thanks guys. I certainly do have some good lessons learned here. More lessons from the school of hard knocks. I can honestly say I still love what we do, even in the more difficult times.

Thanks a ton for the advice, it has all been very well noted


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## whitebeast88 (May 27, 2012)

glad you were able to get the majority of your money,now you know not to deal with him again.you did right by following the plans.some people just want to be dis-honest and there is nothing you can do.thanks for the update.


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## fge (Sep 8, 2008)

Lol


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## a1Jim (Aug 9, 2008)

You learned lots of lessons on this job but it seems you have not learned one. Don't give up on money that people that owe you money,sure your got 4k of what was due but this guy still stole $1,000 from you. Would you take $1,000 and flush it down the toilet? The attitude your taking is exactly what he's counting on . Dog this guy until he's so sick of hearing from you that he will be glad to pay $ 1000 just to get rid of you. These kind of guys like to stand around and tell there buddies how easily they did you out of a $1000 and suggest they do the same when they do business with you. A strong contract is a good idea but it still has to be followed up with legal action costing time and money.


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## rustfever (May 3, 2009)

First, assume the prime contractor may play games with your money. Therefore, insist upon using YOUR contract, not his. If he does not like it. then you can assume he wants the deck stacked in his favor, not yours. make sure your contract have full disclosure of the consequences of 'failure to pay when due', including all attorney's fees.

Second, get all of your costs in the main payment. Use prepayment for all materials.

Third, main payment is due in full as you arrive on the job to do the final installation. Not the next day, but as you arrive on the job. No Pay, no install

Fourth. never, never, never allow 20 % retention. Maximum is 10%. I insist upon 5% max You don't like my 5% retention, therefore I assume you are going to use the retention to stiff me. I'm better off not to do your job.

Fifth, Get your lawyer to send the prime contractor a demand letter. Copy to the lender/owner/suppliers/everyone he has talked to in the last year!

And do not forget to file the proper papers that acknowledge you lien rights.

Remember. it is your rightful money out of which he is screwing you. Defend yourself. first with posture, then contract, then law

From one who has been taken advantage of many time. I speak from experience. Take it or leave it


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## reedwood (Jan 27, 2011)

"More lessons from the school of hard knocks."..... couldn't have said it better myself.

Sounds like a job you can be proud of and the builder should have no reason to bad mouth you. That is worth ten times the 1000.00 you can write off.

Let it go. Move on. Don't let it consume you in anger.

All in all, after reading this, I can say you are an honorable man caught up in a difficult situation. You did good.
We've all been there, trying to figure out what happened, how to fix it and still get paid.

V. I. F. - verify in field…... lesson learned.

On to next one!


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## 1thumb (Jun 30, 2012)

"So he withheld the 1,000 because we left 38" opening for his stove"

No, he withheld the $1,000 because he is a liar and a thief. He reached into your back pocket, pulled out your wallet and took one thousand dollars from you. Very little difference than if a street thug would of put a pistol in your face and done the same thing. The end result is the same


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## jusfine (May 22, 2010)

Jerry, I also feel like you were taken advantage of as others have stated.

As a contractor, we do have a 5% holdback in place on all of our contracts until the submission of O&M manuals, deficiencies etc have been rectified, etc. but this is clearly spelled out and agreed to when we issue our Purchase Orders. And it is common practice in construction here.

We also request progress draws so that there is a minor amount at the end of the contract - any items not identified earlier as a problem on the close-out list cannot be brought up at the end.

I think I would still speak to them about splitting the held $1000, due to the reasons you quoted. Doesn't hurt to discuss it with them and it could be $500 more in your jeans…

All the Best!


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## huff (May 28, 2009)

Jerry;

You need to go back and read A1Jims post (#90) again. He hit the nail on the head. This guy is laughing at you and will be laughing all the way to the bank.

The only problem you may have is if he put on his final check "Paid in full" and you accepted it. Then you agreed that the bill is paid in full and you agreed to the final price.

I believe the biggest lessons you should learn is; if you want to deal with contractors, then you have to be willing to let them do the selling for you, set the quality standards, set the price, and decide how and when you will get paid.

You can put a ton of stuff in a contract, but bottom line, you will get pushed around if you allow it and that's exactly what he was banking on. A good contract will give you better leverage, but how far will you be willing to push it when the time comes.

Good luck and stay busy my friend!


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## KayBee (Jul 6, 2009)

Let's see if I got this right. He's keeping $1000 of your money because you built it correctly to his prints. That's not right. That is your and your family's money, you worked hard and earned it.


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## huff (May 28, 2009)

Jerry,

I guess I need to confess that any advice I can give you on collecting your money is based strictly on dealing with the consumer and not contractors.

I've never had to take anyone to court, I never had to place a lein on anything to get paid and never lost any money with dealing with customers.

I took pride in the fact that I operated a successful custom woodworking shop for over 27 years and never dealt with a contractor as a sub. Too many horror stories and from all the advice I've seen you get here, nothing has changed.

Most shops will tell you; you need to deal with contractors because they can get you the work. I decided from day one that I was better at selling my work then any contractor or designer.

I wanted to please the homeowner, not some contractor or designer.
I wanted to be able to price my work to make money
I wanted to control my standard of quality, which directly affected my pricing
I wanted to control my time schedule to build things.
I wanted to control my time for delivery, not based on 5 other subs and the General contractor.
I wanted to control how and when I got paid
and I wanted to be paid as soon as the job was completed and the customer was satisfied.

I would rather spend my time tracking down work and selling my own work then tracking down some contractor so I can get paid for work I already did.

I know there is a good argument from both sides of the table, but just wanted to let you know that contractors don't have to be your only scource of work.

I found over the years when the economy took a hit, usually contract work also took a hit. My work never seemed to be affected as much.


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## JJohnston (May 22, 2009)

I don't know about that "Paid in Full" on the check business. I don't imagine it would work very well if I wrote it on my next mortgage payment.


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## huff (May 28, 2009)

JJ,
Exactly; The only time I had a customer try that with me was she wrote the check for $100 less then the balance due, but put "paid in full" on the memo line.

I sent her a very polite letter (with her check enclosed) thanking her for her payment, but sorry to say the check was made out in the wrong amount and I've enclosed a copy of the invoice showing the balance.

I received a check for the full amount a few days later and her husband told me later that was a trick she pulled all the time and got away with it quite often.

Just a little thing my attorney told me to look out for. If I had accepted her check and desposited it, it was like a signed contract that I agreed to the final price and payment and most small claims courts would judge on her side.


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## fge (Sep 8, 2008)

Lots of good advice. I am filing the Lien for the 1000.00. No real issue just to file a lien.

I agree with the advice given here, lots of very encouraging input.

John, I do agree the home owner is better. We actually do the same, mostly home owner sales. I have tried getting on with builders but my efforts to sell to builders has been unsuccessful for the most part. Occasionally we will get a builder, otherwise most customers get us online, word of mouth, walk in traffic. But I certainly agree with all of your thoughts as to being in more control.


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## OggieOglethorpe (Aug 15, 2012)

*Jerry, I haven't done it in Texas, although I live here, but call the county sheriff and have them send a deputy with you.
You own that product, not the contractor.*

Maybe… Maybe not… They guy paid SOME of the money.

Once you finish with being polite, I'll second or third the mechanic's lien.

As a last resort, if you don't care about this guy in the future, picket his project! Bring your kids! As long as everything you say or put on a sign is true, there is absolutely nothing he can do to you.

In my state, small claims is useless, as it has zero collection power. You can win, but if he still doesn't pay, tough nuts…


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## NiteWalker (May 7, 2011)

I didn't read the entire thread, but a good chunk of it.
Bottom line, your worked for the money, you should get paid, even the $1000 he's withholding because of his own mistake. Good on you to file the lien. Make the dirtbag pay what he owes.


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## fge (Sep 8, 2008)

Thought it might be nice to add a few of the pics from the job. It actually was one of the best jobs we have ever done. Turned out very nice.


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## fge (Sep 8, 2008)

we did the entire house full of custom cabinetry, I am only showing the kitchen area.


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## fge (Sep 8, 2008)

with all the work we did on this job, some minor paper work for a lien would be no big deal. Then I will just let the chips fall as they may and begin to look forward to future success.


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## fge (Sep 8, 2008)

Barry, I did think about picketing his project. That would be cool. But that is time invested and we tend to be very busy.


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## a1Jim (Aug 9, 2008)

Jerry 
Tell the contractor that your going to picket after you have called the local news and news paper(give the news a specific time),if you really have to go an picket .you just have to be there long enough for the news guys to get your story and then leave(how much time does it take you to make $1000 ?.) I would check with other subs in the area and see if he's done the same to them, if that's the case invite them to picket with you. use that as a tool against him when you talk to him telling him what your going to do.Most guys would not want the bad press and even if he doesn't pay up your warning other subs to look out for this guy through the press ,making it tough for him to do business.
BTW
Nice looking cabinets


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## 1thumb (Jun 30, 2012)

"In my state, small claims is useless, as it has zero collection power. You can win, but if he still doesn't pay, tough nuts…"

True, but a court ordered judgment goes on his credit report if he doesn't pay. Beautiful work Jerry, get all your money.


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## OggieOglethorpe (Aug 15, 2012)

Credit report for who or what? He's probably operating as some sort of limited liability or corporate structure.

Small claims here is about as useful as the Better Business Bureau.


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