Non paying customer

Freddiboi · 21 Dec 2009

Hi Guys

I am looking for some advise on where best to post a question regarding a customer of mine deciding not to pay the retention now he has his completion in his hands.

I have recently set up in business on my own as a joinery/building company and sub-contract all other trades except my own trade as a joiner, this is my forth medium sized job (a two storey side extension) and my first time coming up against this problem of the customer delaying payment of the retention, and a bit stuck in what to do.

There has been a couple of issues with other trades over the period of the build e.g not turning up when they had arranged to and not so good a leak in the upstairs bathroom after the job was completed.

I have been most accommodating to the customer over the build time and have done extra jobs at no additional cost, but i feel he has a bee in his bonnet about the time taken for myself to complete the extension, one month over the said build time of three months, due to the delays mentioned

So to the point of the post, what advise can ppl give about easing his grip on my cash! apart from going round his house and takin' it out his head!
Can i serve him with some kind of legal letter or dept collection company, as afore mentioned he now has his completion certificate and a very nice extension to suit.

Any advise would be much appreciated.

Regards Freddiboi

dextrous · 21 Dec 2009

What are his reasons for the delay in payment?

conny · 21 Dec 2009

If he has signed something to say he is satisfied with the work and agrees it is completed then he should hand over the payment.
However, if he has had problems with your work or the work of any subbies you used he may be entitled to withhold part of the payment until such issues have been resolved to all parties satisfaction. The amount he withholds should be mutually agreed and put in writing along with a date for full and final completion.

PS Might be an idea to post this in 'TradeTalk' where you will get more professional advice. This is a general Discussion Forum.

dextrous · 21 Dec 2009

As Conny says.

It's a minefield being the main contractor. I would approach him and remind him of goodwill gestures made by yourself in doing unpaid work for him, and ask him for a snagging list. If there is/are any outstanding issues in the quality of work, then he has a legal obligation to permit you to make good. If any of the snags are on the unpaid work, then remind him of that fact, but make good anyway.

Things you wil have learned from this in particular -

1/. Always give a written quote with precise details of the work to be done
2/. Get the customer to sign a contract with specific details of any late penalty clauses, and if possible a payment schedule which stipulates that any delay in completion does not mean a delay in subsequent payment.
3/. The contract should include a 5-10% final payment, payable upon receipt of the completion certificate (and not a snagging list which will be covered by your 6-12month guarantee of work as you see fit)

ColJack · 21 Dec 2009

you kept him waiting an extra month, why shouldn't he do the same?

conny · 21 Dec 2009

you kept him waiting an extra month, why shouldn't he do the same?

Because he has already had an extra months interest on the money and if the job is finished he should pay up.

Put yourself in the contractors shoes and see how you would feel.
Just my opinion.

Freddiboi · 21 Dec 2009

Cheers guys

We both signed a general works contract at the beginning of the job, all the snagging has been done (two electrical items) and the job is complete He has had the completion certificate for over a month now, i can only surmise he is unhappy about the time taken to fix the leak as the issue was fixed the same day it happened but as a result of he leak i had to to take the ceiling down in the downstairs bathroom to get access to the problem this is where the delay took place as i had to re-new the ceiling downstairs (two 8x4s) have it scimmed and painted again, but to do this took all of a month as all my subbies were then tied up on other jobs.

I spoke to the client last Mon said he'd post a cheque out last week but nothing has come. So do i go down the legal route, the retention if a good few grand btw not pennies, i know if i speak to him again i may say something that may jeopardise my chances of getting the money even further.

Tnx for the comments so far but was looking for anyone who has had the same prob as me i'll try posting in another topic.

Cheers again Freddiboi

dextrous · 21 Dec 2009

Try speaking to him again then - go round and tell him that the cheque hasn;t arrived and that he can write it while you wait. At least then he can clarify face to face what any issues are.

Freddiboi · 21 Dec 2009

ColJack said:
you kept him waiting an extra month, why shouldn't he do the same?

In the game of being a main contractor you learn fast that if you subby work out you may get a cheaper rate but the reliability of the other workmen is smetimes far more costly to your reputation as a building firm if they do a "no show", and explained to the customer at the beginning of all of my jobs some times it is the case that there maybe delays in the job due to the fact i use "out of house" contractors and can't lead other tradesmen by the hand to their job but try to co-ordinate things to the best of my ability.

You sound like someone who has had a bad experience with a coment like that..

Norcon · 21 Dec 2009

but as a result of he leak i had to to take the ceiling down in the downstairs bathroom

What leaked? Drain, compression, plastic pushfit, mains, gravity supply etc?

(my guess is some plumber who lashed in something and didn't pressure test, probably pushfit of some kind)

I spoke to the client last Mon said he'd post a cheque out last week but nothing has come.

Are the postmen not on strike these days?

WDIK · 21 Dec 2009

KNEE CAPS

Donkmeister · 22 Dec 2009

Freddiboi said:
if you subby work out you may get a cheaper rate but the reliability of the other workmen is smetimes far more costly to your reputation as a building firm if they do a "no show", and explained to the customer at the beginning of all of my jobs

That's a good approach, in my opinion. The alternative is to add a contingency budget in to cover the costs of getting a worker in at short notice (i.e. by paying over the odds) to cover no-shows.

First thing, do you have a contract with the Customer? Does it define the milestones where he will pay you, and what he will pay you? If you have defined the completion, and you have met that definition, then legally he is obliged to pay you.

Phone him cordially, then explain the cheque hasn't arrived ("Tsk, Christmas post, what can y'do!"). Explain you are anxious to get it in the bank before Christmas so it will clear soon after New Year. That way, he is aware that he will be paid before the cheque clears, so you will put him at ease if his worried about the cheque bouncing. Leave the phonecall at that.

Later on that day, knock on his door ("I was in the next street doing a quote, thought I'd pop by and check the snags have all been worked out") explain that you're desperate to get the cheque in the bank before closing and ask him to write you another cheque. If he quibbles about having written you two cheques, offer to pay the £50 or so to cancel the cheque he's already sent you. You'll lose £50 on this, but that's better than losing a few grand and cheaper than a day off work to go to court.

Would be interesting to see why he's withholding money though, perhaps he doesn't understand what he pays you and when.

You've worked for the guy, what do you think?

WDIK · 22 Dec 2009

what a load of old tosh?

knee caps first, then determine terms

Mw Roofline · 22 Dec 2009

Next time you draw up a contract, have him sign a seperate terms and conditions where it says payment and interest details.

I can always email you ours

BREAKALEG · 22 Dec 2009

I've been there mate, after say 3 letters chasing payment and 2-3 broken promises over the phone i would start knocking on his door the first time at around 7am in the morning on the way to another job!
Persistance pays, forget the legal stuff at the moment direct confrontation is normally more of a worry to customers as the legal route can take a lifetime and be costly.
Hound him on a daily basis if you need to its your money, tell him you are desperate for payment as you have an overdue tax payment.

Non paying customer

dextrous

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