Back charges...Embezzlement or legitimate procedure? - REO Property Preservation Forum
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post #1 of 23 (permalink) Old 07-25-2013, 10:52 AM Thread Starter
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Back charges...Embezzlement or legitimate procedure?

What are your thoughts.
If you have Back Charge clauses in your contracts would like to see them for review for a white paper to be issued on this subject.

If you have a back charge over one +one day especially interested in those...
Please spell everything out.
Type of work order
reason for action
was any type of resolution offered
Length of time from completion of job until back charge....

Working on anew survey format for tracking purposes so it may be another week until I can put things together and reply on last survey....

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post #2 of 23 (permalink) Old 07-26-2013, 05:39 PM
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It's a legitimate procedure for the service companies. They are the ones who are contracted by the banks and subbing the work to you, they can and will charge you back to suit their needs. I don't work for any but i'm sure you signed some sort of agreement and it probably has something in there about charge backs.

As for direct work? Nope, not even a possibility!

So they are charging you back for missing photos, late, whatever reason they want... but they are still getting full amount from THEIR client!
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post #3 of 23 (permalink) Old 07-26-2013, 09:25 PM
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I've always felt it was fraud.


ESPECIALLY the ones that are 3 plus years after the fact. You get back charged for 10 grass cuts from 3 yrs ago because you were missing pics.
NO ONE that is thinking rationally is going to believe for a second that the national/regional's client the bank is doing this.

Professionals are people who can do their job when they don't feel like it.
Amateurs are people that can't do their job even when they do feel like it.
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post #4 of 23 (permalink) Old 07-27-2013, 06:57 AM Thread Starter
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I placed the same thread on LinkedIN...it has some serious legs over there...and I only placed the title...no narrative like I have here....that said...

This will the subject of my next survey. I'm current going over some contract clauses that have been sent to me.
If anyone has this particular section of a contract that is in effect or from a contract that was sent to be signed I would like to review it to formulate questions.

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post #5 of 23 (permalink) Old 07-27-2013, 07:01 AM
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Many of you may not like my response, but I'm going to offer another point of view. Some and I mean that ONLY SOME backcharges have their place. I'm certainly not advocating for them.

Case and point:

Just finished building a house about a month ago. One of the last items for me to get completed for a certificate of occupancy was sod/landscape. I have used this particular sod guy for many years. As he is sodding the front yard (working from back to front), his skid steer destroys 3- 4'x4' concrete pads on the public sidewalk. He does alert me to this, however it was his negligence that caused this damage. They got in a hurry and didn't build a dirt ramp over the new flatwork. Therefor, I had to inform him that I would be backcharging him in the amount of $300 to have my concrete guy come back and tear out and replace the 3 pads. It was an unfortunate accident, but it happened. Somebody had to be held accountable, and it certainly wasn't myself. All my subs have a signed sub-contractor agreement with a damage clause in the contract.
Simply put, the margins are too tight to not hold people accountable for their actions.
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post #6 of 23 (permalink) Old 07-27-2013, 07:10 AM Thread Starter
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Quote:
Originally Posted by P3+ View Post
Many of you may not like my response, but I'm going to offer another point of view. Some and I mean that ONLY SOME backcharges have their place. I'm certainly not advocating for them.

Case and point:

Just finished building a house about a month ago. One of the last items for me to get completed for a certificate of occupancy was sod/landscape. I have used this particular sod guy for many years. As he is sodding the front yard (working from back to front), his skid steer destroys 3- 4'x4' concrete pads on the public sidewalk. He does alert me to this, however it was his negligence that caused this damage. They got in a hurry and didn't build a dirt ramp over the new flatwork. Therefor, I had to inform him that I would be backcharging him in the amount of $300 to have my concrete guy come back and tear out and replace the 3 pads. It was an unfortunate accident, but it happened. Somebody had to be held accountable, and it certainly wasn't myself. All my subs have a signed sub-contractor agreement with a damage clause in the contract.
Simply put, the margins are too tight to not hold people accountable for their actions.
Techniquely that is not a back charge....as you stated that is damage/negligence...I'm referring to issues like were pointed out above. If you're in construction then you know that even on a new home it is a year and a day and is governed by the UCC....I've seen people get a back charge and the property was sold two years ago.....to me that is fraud...theft...perhaps not embezzlement, but if you dig there wil be some impropriety that could be questioned in a court of law...

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post #7 of 23 (permalink) Old 07-27-2013, 07:21 AM
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Quote:
Originally Posted by P3+ View Post
Many of you may not like my response, but I'm going to offer another point of view. Some and I mean that ONLY SOME backcharges have their place. I'm certainly not advocating for them.

Case and point:

Just finished building a house about a month ago. One of the last items for me to get completed for a certificate of occupancy was sod/landscape. I have used this particular sod guy for many years. As he is sodding the front yard (working from back to front), his skid steer destroys 3- 4'x4' concrete pads on the public sidewalk. He does alert me to this, however it was his negligence that caused this damage. They got in a hurry and didn't build a dirt ramp over the new flatwork. Therefor, I had to inform him that I would be backcharging him in the amount of $300 to have my concrete guy come back and tear out and replace the 3 pads. It was an unfortunate accident, but it happened. Somebody had to be held accountable, and it certainly wasn't myself. All my subs have a signed sub-contractor agreement with a damage clause in the contract.
Simply put, the margins are too tight to not hold people accountable for their actions.




To me thats not a back charge in the sense we are talking with nationals.

But you are correct that is legitimate. When doing work at a property the contractor does his best to prevent damage to existing property improvements and if damage does happen makes the property whole again.
Usually I repair my own damages, but if I'm not able to then work out paying for it the best I can. If I hire the repairs or if the contractor or home owner does it and I pay for it.

Professionals are people who can do their job when they don't feel like it.
Amateurs are people that can't do their job even when they do feel like it.
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post #8 of 23 (permalink) Old 07-27-2013, 03:51 PM
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When I think back-charges, I'm thinking about invoices that have already been paid, then months or years later a deduction is sent through on a check. That's a back-charge.

My opinion is, there are times when they are legit, but most of the time, its BS. SG has now stated (actually a while ago) that contractors have to address past due invoices, short payments and the like within 60 days. Hell, we don't even know we haven't been paid for 60 days. But, they will go back as far as they like to bring out a back-charge.

Going back two years and finding out a ruler in the grass photo is missing - is BS.

Going back 1-3 months, and having a live inspector report the condition, and finding substandard work was performed - is legit.
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post #9 of 23 (permalink) Old 07-27-2013, 04:02 PM Thread Starter
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Quote:
Originally Posted by BamaPPC View Post
When I think back-charges, I'm thinking about invoices that have already been paid, then months or years later a deduction is sent through on a check. That's a back-charge.

My opinion is, there are times when they are legit, but most of the time, its BS. SG has now stated (actually a while ago) that contractors have to address past due invoices, short payments and the like within 60 days. Hell, we don't even know we haven't been paid for 60 days. But, they will go back as far as they like to bring out a back-charge.

Going back two years and finding out a ruler in the grass photo is missing - is BS.

Going back 1-3 months, and having a live inspector report the condition, and finding substandard work was performed - is legit.
We are looking for incidents 1 year and 1 day.....after that is what we are looking for right now......

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post #10 of 23 (permalink) Old 07-27-2013, 04:25 PM
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We are looking for incidents 1 year and 1 day.....after that is what we are looking for right now......
This wasn't a year and a day, but mcs back charged me like $20 a couple of months after a lawn cut saying that my photos didn't support height. Fast forward another month or so and I realize they never paid our roof repair. In order to prove to me they didn't Bill the bank for roof repair they sent me their invoice to client. They billed the bank the higher lawn cut price. They only cut my price to line their pockets.
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