$18,000 Backcharge from 2013 - REO Property Preservation Forum
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post #1 of 42 (permalink) Old 09-14-2015, 09:23 AM Thread Starter
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$18,000 Backcharge from 2013

Received an email stating we were being charged back for a winterization performed in October 2013. We had not been to the property since August 2014 and that was for a grass cut. We didn't enter the property.

We had a contractor who performed a wint and reported the boiler was compromised. He did the "best Possible" wint that the client asked for. The office person did not supply a bid for a new boiler.

Since we did not provide the bid to replace the boiler (we are not licensed plumbers) the client decided to hang the entire $18,000.00 charge back on us. We contacted our insurance and they made it pretty clear they were going to deny the claim.

I hopped in a car and drove the 2hrs to the property and the house had sold. The boiler was clearly still in place and there was no power on even though there is a new owner. I left my number and the new owner called me. He was very helpful and told me he had no idea a claim had been filed nor was he replacing the boiler. He is going with forced air.

In the end we learned that the mortgagor who had walked away from the property in 2010 was the one filing the claim. It was his contention that he would have been able to sell the property for more if the boiler had been intact.

I had this squashed quickly by calling the power company and verifying that the power was disconnected in 2010 and had not been reconnected to date. Therefore the property had gone through 2 winters before we ever did the initial secure. Case closed.

The client denied the claim and all is back to normal.

Here is the thing. What would have happened had I not been proactive and gotten involved? Why would the client have even entertained this in the first place? How does a guy walk away from a property in 2010 and sell it in June, 2016 after a national has been servicing it for 2 years?

We are done working for nationals this was it for me. We are quietly headed for the door. I've been saying it for years but after this near miss we are done. That was my get out of jail free card and I know it.
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post #2 of 42 (permalink) Old 09-14-2015, 09:59 AM
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Received an email stating we were being charged back for a winterization performed in October 2013. We had not been to the property since August 2014 and that was for a grass cut. We didn't enter the property.

We had a contractor who performed a wint and reported the boiler was compromised. He did the "best Possible" wint that the client asked for. The office person did not supply a bid for a new boiler.

Since we did not provide the bid to replace the boiler (we are not licensed plumbers) the client decided to hang the entire $18,000.00 charge back on us. We contacted our insurance and they made it pretty clear they were going to deny the claim.

I hopped in a car and drove the 2hrs to the property and the house had sold. The boiler was clearly still in place and there was no power on even though there is a new owner. I left my number and the new owner called me. He was very helpful and told me he had no idea a claim had been filed nor was he replacing the boiler. He is going with forced air.

In the end we learned that the mortgagor who had walked away from the property in 2010 was the one filing the claim. It was his contention that he would have been able to sell the property for more if the boiler had been intact.

I had this squashed quickly by calling the power company and verifying that the power was disconnected in 2010 and had not been reconnected to date. Therefore the property had gone through 2 winters before we ever did the initial secure. Case closed.

The client denied the claim and all is back to normal.

Here is the thing. What would have happened had I not been proactive and gotten involved? Why would the client have even entertained this in the first place? How does a guy walk away from a property in 2010 and sell it in June, 2016 after a national has been servicing it for 2 years?

We are done working for nationals this was it for me. We are quietly headed for the door. I've been saying it for years but after this near miss we are done. That was my get out of jail free card and I know it.
I hear you. We had too many close calls and we called it quits. Nationals don't do their home work and they try to dump it on the contractors.
Anyone who is thinking about getting into P&P now, should read this post and think 10 times and then decide nah, not worth the risks. We sent FAS and SG jump to the lake while back. My only suggestion, don't tell them you quit. Tell them you got family situation and want to cap yourself for few weeks, then extend it and say buy-buy once your AR at 0.
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post #3 of 42 (permalink) Old 09-14-2015, 10:26 AM
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Wow. Incredible post. Thank you for the information. I am currently working for a national and I don't ever recall being informed about the possibility of "backcharging" and I don't think its specified in the contract. Breach of contract? Deliberate withholding of information?
btw what is AR? Is that work order queue or paid out invoices?
thanls agin for the vital info!!!
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post #4 of 42 (permalink) Old 09-14-2015, 10:29 AM
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As much as I agree that the nationals/regionals are not the people to be getting work from, but in this business is there enough work to get from the brokers? Enough to keep your crews busy full time? Enough to replace the income lost by leaving the nationals? I've been considering this for years mainly because I can't stand that they expect us to work 365 days a year with 48hr turn around times. I need time with my family and I refuse to compromise my home life for this company. If I screw up that's 1 thing and I will go out for a few hours on a Saturday for my bad time management, but to work willingly every weekend because they think we should is ridiculous. Aside from that, the cost estimator and BATF bids getting cut makes some jobs a loss. I know not every job can be a home run, but you should be in the black on every order unless you screw up and need to fix it. We are all in business for ourselves, we should be able to dictate at what rate we can complete work in, and deny work that can't be completed for that amount.
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post #5 of 42 (permalink) Old 09-14-2015, 10:39 AM
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As much as I agree that the nationals/regionals are not the people to be getting work from, but in this business is there enough work to get from the brokers? Enough to keep your crews busy full time? Enough to replace the income lost by leaving the nationals? I've been considering this for years mainly because I can't stand that they expect us to work 365 days a year with 48hr turn around times. I need time with my family and I refuse to compromise my home life for this company. If I screw up that's 1 thing and I will go out for a few hours on a Saturday for my bad time management, but to work willingly every weekend because they think we should is ridiculous. Aside from that, the cost estimator and BATF bids getting cut makes some jobs a loss. I know not every job can be a home run, but you should be in the black on every order unless you screw up and need to fix it. We are all in business for ourselves, we should be able to dictate at what rate we can complete work in, and deny work that can't be completed for that amount.

Expand OUTSIDE of P&P. P&P is just a minor part of my business. I do small building projects, Additions, Remodels, Garages, Install garage doors, Build yard sheds, Do field mowing, Mow for private clients, Roto-till gardens, Haul debris for private clients, Rekey for new owners, Do vacation home maintenance, Build/repair docks Ect. P&P is about 10-15% of my model today compared to 90% in 2009......
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post #6 of 42 (permalink) Old 09-14-2015, 11:09 AM
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Expand OUTSIDE of P&P. P&P is just a minor part of my business. I do small building projects, Additions, Remodels, Garages, Install garage doors, Build yard sheds, Do field mowing, Mow for private clients, Roto-till gardens, Haul debris for private clients, Rekey for new owners, Do vacation home maintenance, Build/repair docks Ect. P&P is about 10-15% of my model today compared to 90% in 2009......

I really don't like working with customers as they can be a pita, so I've tryed to stayed towards the P&P and REO side of things so I don't have to deal with people on a daily basis, just the RVM's of whatever company is sending me the work
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post #7 of 42 (permalink) Old 09-14-2015, 11:14 AM
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Why would the client have even entertained this in the first place?
These nationals have people that will work with the person filing the complaint. They will beat them down in settlement price and then make claim on your insurance for the full amount.

In this case they would tell the homeowner they don't have a solid neglect case against the contractor, "we can offer you $5000 towards a new boiler". Where do ya suppose the remaining $13,000 would go? *#@!!**!## crooks.

I haven't done a wint since 2014 and was starting to breathe easy till I read this. Apparently I'm not out of the woods yet.
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post #8 of 42 (permalink) Old 09-14-2015, 11:25 AM
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I hope you work it out. Best wishes.
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post #9 of 42 (permalink) Old 09-14-2015, 12:06 PM
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Good post Craigslist. We had a similar situation except a realtor had water turned on without having the heating system and broken plumbing fixed. Entire house flooded (3 stories). $170,000 claim.

Thankfully we did "utility turn ons" in 9 States and made a lot of Late Night friends (best time to call for utility restores was 11pm to 4am) and we got the information who requested what utility was restored and by whom. Saved our bacon!!
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post #10 of 42 (permalink) Old 09-14-2015, 12:18 PM
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Be sure to bill them for your time defending and

researching the issue. Make it a crazy high price and demand your money in 10 days, on the 11th day inform the new owner, the old company and their client, of your intent to lien. Also remember to void any discount you may have been extending on the original job, along with late charges. Make them think twice before they try to up their bottom line that way again. I'm through playing with these companies. they will act in good faith or they will suffer costs, even if they don't end up paying me, it will cost them.
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