# Back charges...Embezzlement or legitimate procedure?



## Cleanupman (Nov 23, 2012)

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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## bigdaddy (Mar 3, 2013)

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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## BPWY (Apr 12, 2012)

*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.


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## Cleanupman (Nov 23, 2012)

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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## P3+ (Aug 16, 2012)

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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## Cleanupman (Nov 23, 2012)

P3+ said:


> 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:
> 
> ...


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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## BPWY (Apr 12, 2012)

P3+ said:


> 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:
> 
> ...






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.


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## BamaPPC (May 7, 2012)

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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## Cleanupman (Nov 23, 2012)

BamaPPC said:


> 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.
> 
> ...


We are looking for incidents 1 year and 1 day.....after that is what we are looking for right now......:whistling2:


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## SwiftRes (Apr 12, 2012)

Cleanupman said:


> We are looking for incidents 1 year and 1 day.....after that is what we are looking for right now......:whistling2:


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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## Cleanupman (Nov 23, 2012)

SwiftRes said:


> 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.


Starting to hear some real scurvy stuff about this company


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## hammerhead (Apr 26, 2012)

Sorry but once paid for job it should be case closed. They have 60-90 to do their QC checks. If they are behind on them that's not our fault. Once payment has been made that should be an admission that job was completed as required.


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## browneyedgirl (May 17, 2013)

That charge back crap is a load of bull they no they got the work done they have the pictures and then when they state not enough picture to support work completed so they charge back and you know they got every penny plus more just a way of not paying a contractor to me you should be able to go back and get all the inventory and material that you put on are in the property if they are not going to pay


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## Cleanupman (Nov 23, 2012)

browneyedgirl said:


> That charge back crap is a load of bull they no they got the work done they have the pictures and then when they state not enough picture to support work completed so they charge back and you know they got every penny plus more just a way of not paying a contractor to me you should be able to go back and get all the inventory and material that you put on are in the property if they are not going to pay


I agree....I have


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## BPWY (Apr 12, 2012)

I know folks that when back charged for a trash out they made sure the national got their moneys worth out of the deal.

If you catch my drift.


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## Wannabe (Oct 1, 2012)

I was backcharged from Safeguard for not being able to tell we mowed a 10acre field with 20'+ horseweeds. Bought the abandoned alley that seperated the house backyard to the field entrance gate (cost $60.00 to buy) & put up a fence. 

Boy O Boy did the fur fly! 

I loved that little strip of VERY VALUABLE land 12'x500'. It was worth $70k  Sold it to mortgage company so they could sell home 2 yrs later. A bigwig at the Bank of NY asked how and why I purchased this abandoned alley and I told them leverage. He said SG missed this on the title and abstract and had to pay the costs associated.


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## Cleanupman (Nov 23, 2012)

I'm currently developing a system to conduct survey's where the informatio can be streamlined into charts and graphs...
I'm looking for sections of contracts on this subject....back charges...
If you have one would you do the copy and paste thing and email to
[email protected]

Should have the questions formulated from comments here and on a couple of other sites I posted the same question....

Thanks...


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## GTX63 (Apr 12, 2012)

Wannabe said:


> He said SG missed this on the title and abstract and had to pay the costs associated.


Also had one where an investor bought the 20'x75' piece of property for about $500 that a detached garage sat on, with the concrete driveway, only 3' from the house. The investor installed a metal gate in front of the drive and waiting for someone to buy the house. He sold it for 10k. It went back up the food chain thru the title company, assessor's office, the National and the lender. That is what insurance is for, but it should make you think the next time you have to input the lot size for your mowing invoice.


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## Cleanupman (Nov 23, 2012)

GTX63 said:


> Also had one where an investor bought the 20'x75' piece of property for about $500 that a detached garage sat on, with the concrete driveway, only 3' from the house. The investor installed a metal gate in front of the drive and waiting for someone to buy the house. He sold it for 10k. It went back up the food chain thru the title company, assessor's office, the National and the lender. That is what insurance is for, but it should make you think the next time you have to input the lot size for your mowing invoice.


I have always wondered the purpose of having to place lot size on invoices...checking our loan documents that information is on there so when they say the client.....uh huh


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## Ohnojim (Mar 25, 2013)

*I'm the guy who gets the work order*

for things that are missed or screwed up, and in most cases it is not worth my time. I now bill the cost of the initial service usually it's a $175 cleaning. I also charge back the discount, sometimes it doesn't fly, and we negotiate it down a bit. 
In those cases or where there are blatant deficiencies a chargeback is the only way to straighten it out. 
If I come in behind someone and have to do all the work, I have to have all the money.


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## Cleanupman (Nov 23, 2012)

Ohnojim said:


> for things that are missed or screwed up, and in most cases it is not worth my time. I now bill the cost of the initial service usually it's a $175 cleaning. I also charge back the discount, sometimes it doesn't fly, and we negotiate it down a bit.
> In those cases or where there are blatant deficiencies a chargeback is the only way to straighten it out.
> If I come in behind someone and have to do all the work, I have to have all the money.


That is understandable, However, what sort of time frame are you talking???


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## Ohnojim (Mar 25, 2013)

*The time frame is not my issue.*



Cleanupman said:


> That is understandable, However, what sort of time frame are you talking???


My properties have to be cleaned every 30 days or less. Since I may have properties in my inventory for several months to years in some cases, they have to be able to pass an inspection after my first cleaning. So,that gives them thirty days before I have to take action. Usually however their will already be a QC work order issued to me, even though it's technically not my issue yet. If it's just an item or two or something stupid like a wire nut, or gas line cap or minor dirt no problem. I'm sure there are a lot of abuses of the backcharge. As a routine contractor I am expected to complete QC issues within 24 hours, so they have ample time form my point of view. I can tell the difference between an overlooked item or someone in a hurry, from someone who makes no effort or stages shots. The later get milked for every penny I can get out of the office.


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## MNanny (May 23, 2013)

Ohnojim said:


> My properties have to be cleaned every 30 days or less. Since I may have properties in my inventory for several months to years in some cases, they have to be able to pass an inspection after my first cleaning. So,that gives them thirty days before I have to take action. Usually however their will already be a QC work order issued to me, even though it's technically not my issue yet. If it's just an item or two or something stupid like a wire nut, or gas line cap or minor dirt no problem. I'm sure there are a lot of abuses of the backcharge. As a routine contractor I am expected to complete QC issues within 24 hours, so they have ample time form my point of view. I can tell the difference between an overlooked item or someone in a hurry, from someone who makes no effort or stages shots. The later get milked for every penny I can get out of the office.


So, are you talking REO properties after they have moved over to HUD or bank owned inventory? Government backed and bank owned are very differently treated. Broker maintained or bank maintained? I do a lot of REO managed by MFS but not too many bank managed. If you can backcharge on HUD properties I would be very interested in learning how you phrase your invoices. I get away with initial clean or sales clean charges on a QC but seldom any more.


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