Taking payments for work done. Would you do it?

Bob, Write up a contract and include a clause in there that addresses the potential problem of missed payments. Many generic contracts are available online, get one and modify it to suit your needs (and the buyers needs). Sit down, discuss, agree, sign, done.

We just did a project and carried $1,000 for one year (no interest). I can work. We all gotta eat. :-)

Larry

I don;t know if this is true for Merkia, but in the YewKay, one has to have a credit licence (90 pounds) before you can take payment by installments. (More than three I think)

-- Big Egg Visit my ebay shop for welding and tools and stuff:

Ask for enough to cover cost's up front and and take time payments on your labour only.

cheers rodent

Sign hanging in my shop....

"We have a non-compete agreement with the local bank. If they promise to not build race cars, we will promise to not finance them."

Bob wrote in article ...

Fifty down and fifty on completion is a good rule. My favourite saying is, "Nice guys come in last."

I got a call today and was asked if I take payments. I had not considered this but do understand how some people need to finance things they need. The last hail storm in my area cost me $2500 on my pickup truck. This lady wants to protect her cars but does not have enough cash to cover the entire bill.

How do you guys do this? DO YOU DO THIS?

Do you require contracts or collateral?

Any help will help a lot. Writing up a contract and determining payments is not a problem, being sure I collect the payments is where I have difficulty, what if they don't pay?

Thanks,

Bob

You might want to check into this: Information about the Construction Lien Act (Ontario)

Accepting payments might affect your rights under this legislation or the equivalent where you live. "In simple terms it provides that the lien, unless preserved, expires 45 days after the supply of the service or materials." "Preserving the lien" looks a PITA.

And *collecting* unpaid debts is a horse of another color.

Can you find a way to accept credit cards and let the dunning letters come from Visa rather than you? Of course there's always the possibility of a charge-back in case the cardholder claims the work is unsatisfactory or whatever, but the card companies don't do that without looking into it.

Best regards, Spehro Pefhany

You have got the difficult area pinned down alright. Since local laws vary I would suggest you talk to a lawyer to see just what your rights are and how you secure them assuming there will be more work of this type coming your way to make it worth while.

I agree with the poster who said to cover your materials. Not being paid for your labor is one thing but having laid out your own scarce funds for the materials and being chased by the vendor is another thing.

The suggested Visa route IMO is a good one unless the setup costs etc are a problem. My father ran a garage business in the 50's and credit was the biggest headache. I often think how much better it would have been if Visa etc had been around then. Be wary of people who seem nice and honest as well as the unsavoury types. My father liked to tell the story about fixing some "criminal looking" guys motorcycle and having to accept a personal check for the work thinking that it was worthless. It was just fine unlike the check he received from a pleasant, well-dressed businessman a few weeks later.

Billh

Are you a licensed contractor? In your state, a written contract may only be worth the paper it is written on if you are not licensed with the state, allowing you to enter into contracts of this sort. The homeowner would have posession of the goods, and that constitutes prima facia evidence of you contracting without a license. Where I live in Nevada, the maximum fine for contracting without a license is $10,000. If you are not a licensed contractor, you would have an unenforceable contract. You would have to forfeit the work, the materials, plus pay the state a fine.

Be careful! Do some research to determine exactly where you stand. Yes, you did the work. Yes, you have a contract. Yes, this person SHOULD pay you. But the law takes precedent, and you may be standing behind the eight ball with only your pocketsful of good intentions.

Steve

Mike Graham wrote in news: snipped-for-privacy@zippy.metalmangler.com:

A friend recalled a little used car lot in his neighborhood.

-No Down Payment- was on his sign.

My buddy finally asked him how he did things with -no down payment-.

The owner said, "Yup, no down payment". "Strictly cash". ;-)

Bob wrote in news: snipped-for-privacy@4ax.com:

Another suggestion to influence your decision would be to ask for some of *her* credit references.

Reminds me of an electrician friend who saw his lawyer every Friday afternoon to attach mechanics liens. The list is past across the table to the lawyer and he looks at the list then screams: "You can't do that! That is my house I am having built!!!" Ron just looked at him and told him. "I am your client and you have to put a lien on that house ... Unless of course you can cut me a check." The lawyer was on the phone to the general contractor and Ron got his check.

We will see what he replies. Should answer by Monday.

It sure screws up making a living when everyone in the country wants a hand in your business.

Thanks for the replies, it is sure appreciated.

Bob

You can charge interest and I would suggest that you do. Have them sign a promissory note and then take the work you have done as collateral. That way, if they default on payment, you have claim to this property. This would allow you to remove the work. You should charge 10% interest for your paperwork and as long as you dont charge over 20% you will be okay. If you need some help with your contract and other legal documents, I can get you in touch with the Score lawyer whom you could meet with in our Dallas office. You can schedule an hour meeting with him at no charge.

I am still not sure what I will do. I need to sit down and talk with the people and see if there is another way they can pay.

Thanks,

Bob

You have gotten lots of good advice. But one one seems to have considered what other work you have. I would probably take the job if I did not have any other jobs and if I would get paid the cost of materials up front.

My reasoning is that if you don't have other jobs to do, then you are not giving up certain money to do this job. And this job may get you more work.

You might make one of the conditions that you can put a sign on the car port advertising your work until it is paid in full.

And if you do get stuck, you can always use this as an example of why you do not do jobs except on a cash basis.

It might also depend somewhat on where you live. Word of mouth is more valuable in some places.

Dan

Helloooooooooo?

I wrote recently bringing up the point that it would be wise to get the information regarding whether or not ANY contract you enter into would be legal in your state if you are not a licensed contractor. I have yet to hear one response to it.

I was a licensed steel erection contractor in the State of Nevada for nine years. I know that in my state, a homeowner could contract for work with an unlicensed contractor, then balk at payment and not have to pay the remainder. The unlicensed contractor would then be liable for a fine up to ten thousand dollars plus having to refund ALL payments to the homeowner.

Contracting is different than hourly work in that work is promised for a fixed amount. There is no hourly quote so that the homeowner can stop the work or keep it going at their direction. It covers anything that involves repairs to, improvements on, or building on, real property. This varies by state.

Start at square one and find out about the laws regarding contracting. If you get a pissymoaning homeowner, they will be the smallest of your problems if they involve your state contractor's board. And once you get noticed by the contractor's board, they won't forget you until you either get your license or they fine you out of existence. You will also have licensed contractors in your area calling in your name when they find out you are taking their work. Which is right and fair. Yes, you can do work for a while if everyone is happy, but sooner or later, a licensed contractor will drop a dime on you.

So far, you are only addressing the lump in the carpet, and not the underlying hidden issues. These boys are serious and they don't just go away.

Steve

All good and valid points Steve, and I sort of brought them up in a previous thread where we learned that Bob is in Texas, which doesn't license contractors.

JTMcC.

I guess it is lucky I am in Texas. I would not want to deal with all those hassles. I just want to feed my family.

Thanks for all the replies, they sure do help.

Bob

Guess I did miss one post or two on this. My apologies. If Texas does not have some of the really stupid laws other states has regarding contracting, so much the better. I certainly do like their relaxed carry laws.

As to how to get payments, that is up to you. I used to do it fifty fifty. When I had to wait on commercial accounts, I just added fifteen percent the next time. Or more. All you can do is a good job and hope you get all your money.

Steve