How to deal with a pesky sub - REO Property Preservation Forum
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post #1 of 50 (permalink) Old 03-07-2013, 10:48 PM Thread Starter
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How to deal with a pesky sub

I have a sub that is very annoying and pesky. I cut off work to this sub Jan 10, 2013. With my company I've made it a policy to rendered final payment 90-120 from last job. I do this to make sure my clients pay out and don't cut my invoices or whatever. Needless to say this idiot has called my client and complained and threaten to lien properties. My contract has a waiver of lien rights and a clause that late work will be penalized to the tune of 50 percent for 1 day late then 100 percent for 2 days or more late. From her invoices their is $1100 dollars discounted off for late work according to the contract. Problem is she never fully signed the contract but verbally agreed to it because at the time her husband was having surgery and we both just forgot about it. What should I do?? Love to hear your thoughts.
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post #2 of 50 (permalink) Old 03-07-2013, 11:21 PM
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To be honest 90 - 120 days out would be a non starter for us. Considering she did not sign the contract then none of it is really enforceble. I know I for one would have already liened the property after 60 days.
Doesn't matter what the contract states, in some states you can lien the property no matter what. Best bet would be to pay up, besides if it is taking you over 3 months to get paid from your client that is your problem not the subs.
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post #3 of 50 (permalink) Old 03-07-2013, 11:47 PM
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As a GC in WI, I can legally lien (and so can my subs) any property that I haven't been paid on or haven't paid them on with in 60 days, irregardless of any contracts. All I have to do is notify the party contracting with me of this fact. Guess what, every bid and proposal has this disclaimer on page 1.

I can see 30 days, longer than that is ludricous. QC your subs work. Don't wait to see what your client does. Afterall, your sub worked for you. Not your client.

Just my $0.02 worth



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post #4 of 50 (permalink) Old 03-07-2013, 11:55 PM
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Lien wavers are for after work is completed, we often do final payment lien wavers, but I would look into the legalities of the contract lien wavers they might not be valid in your state. Our national puts a disclaimer at the bottom of each order " by accepting this you waive lein rights..Mediation... Blah blah" but if they were to take 120 days to pay me it would void the entire contract and I could lien whatever I wanted. Just explain the situation in an email of course the sub will be upset out of a job and waiting on money, but maybe it can keep the tension down to stay in communication. And def get a paid in full waiver for each property!
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post #5 of 50 (permalink) Old 03-07-2013, 11:58 PM
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50% for 1 day late? Wow...
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post #6 of 50 (permalink) Old 03-08-2013, 12:00 AM
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I agree with BradsConst.

Your contract really means nothing (signature notwithstanding) since your State Contractor law takes priority/precedent. 90-120 days? If I was your sub I would have a lien on every property within 30 days of figuring out that work wasn't coming my way THEN I would turn you into the State Employment Agency for unemployment compensation...may win may not but it would sure cause you a lot of unhappy nights.

Ah but then again maybe she really isn't that "pesky"
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post #7 of 50 (permalink) Old 03-08-2013, 03:01 AM
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If it is not in writing it is a rumor, and rumors do not stand up in a court of law. She did not sign the contract so that means basically she gets to dictate terms.

You need to chalk this one up to getting an education from the school of hard knocks and move on.

One lien from her, which is legitimate specifically because she did not sign the contract, and I would be willing to bet hard cash you will loose that customer forever.

I am not even sure your contract is enforceable with payments stretched that far. There are laws that govern how fast a sub has to be paid for work completed particularly when you are dealing with a small business and more so if it is owned by a woman.

The late penalties you have imposed are basically liquidated damages and the law specifically states that liquidated damages cannot be imposed if they are too harsh, if they can be deemed to be a form of punishment or if they exceed the amount that you have lost as a result of the infraction. They are to offset your real loses without you making a profit from them.

And any lawyer worth the ink on his bar license will be able to prove they are one the three aforementioned things.

And if your contract is too one sided a judge will most likely deem it null in its entirety. You have to outline what protections there are for the sub as well as for you.

I would have already filed a Notice of Nonpayment for each property and a Notice to Owner for each property and if I go through that much expense and trouble you will need to drive the cash to me to keep it from becoming a lien.
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post #8 of 50 (permalink) Old 03-08-2013, 04:06 AM
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Quote:
Originally Posted by tak View Post
I have a sub that is very annoying and pesky. I cut off work to this sub Jan 10, 2013. With my company I've made it a policy to rendered final payment 90-120 from last job. I do this to make sure my clients pay out and don't cut my invoices or whatever. Needless to say this idiot has called my client and complained and threaten to lien properties. My contract has a waiver of lien rights and a clause that late work will be penalized to the tune of 50 percent for 1 day late then 100 percent for 2 days or more late. From her invoices their is $1100 dollars discounted off for late work according to the contract. Problem is she never fully signed the contract but verbally agreed to it because at the time her husband was having surgery and we both just forgot about it. What should I do?? Love to hear your thoughts.
I you hadn't posted here before I'd have said you were trolling....
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post #9 of 50 (permalink) Old 03-08-2013, 04:08 AM
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[QUOTE=Blonde25;43917] but if they were to take 120 days to pay me it would void the entire contract and I could lien whatever I wanted. QUOTE]

If they take 120 days to pay you, in most states, by that time, you have lost your lien rights.
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post #10 of 50 (permalink) Old 03-08-2013, 06:38 AM
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Knock on wood...never had to lien a prop yet for non payment. As far as subs go......I always pay my subs upon completion, I hired them, I pay them regardless of the deal I have with the client I'm working for. Had the same face to face meeting with a client 2 yrs ago about 60-90 pay. (original deal was 30 day max) They said they can't pay till their client pays. I said no way, YOU hired me, you pay me on our agreed terms. Heated argument with the head honcho until they cut a check while I sat at the table and we parted ways.
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