# How to deal with a pesky sub



## tak

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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## brm1109

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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## BRADSConst

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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## Blonde25

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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## Sicoupe06

50% for 1 day late? Wow...


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## Wannabe

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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## Gypsos

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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## GTX63

tak said:


> 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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## GTX63

Blonde25 said:


> 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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## danny1217

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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## Craigslist Hack

WHEW!!!! lots of horrible advice here! Since I doubt any of us are attorneys, my advice is see an actual attorney and don't get your legal advice on a message board.

I have been through this a few times and like you we hold final payment for a minimum of 90 days. We also are indemnified and held harmless the same as our clients. It is much harder to lien a property than most would have you believe. Once the lien has been filed it still has to be perfected and must hold up in a judges eyes. The fact that neither of you has a contract is just as good for you as it is bad. 

In most of these cases the sub needs the money so you will find them more willing to settle. Justify your position through facts make a final offer, with that offer attach a final lien waiver and a statement for them to sign stating this is it. Write them a check and be done.

I have had contractors go out and screw up jobs then bill me double or triple even what the national pays. They call the national and the national will tell them it's between you and the company you were getting work from. If this person will not reason and or begins harrasing have a NO CONTACT order slapped on them for $30.00 at the local PD. This order will extend to your business and anyone you work for. If they contact you or your clients again they will face charges.

I had a contractor threaten to come beat one of my office girls this past December. He had gone to a property for a lock change and wint. He for some unknown reason did a trash out and sales clean without a work order. Luckily all he threw away was trash but then he billed me for it. I told him I wasn't going to pay he should have read his work order better. We spell out exactly what is to be done in plain english. This guy had worked for FAS and only knew their way of doing things. In the end I slapped him with charges, my attorney fees, and he now owes me money.:whistling2:


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## GTX63

I read a lot more personal anecdotes than advise. Everyone is free to run their biz as they choose. I don't wait 4 months for payment; I don't make my people wait four months for their money. I don't make my problems with a client the problems of my subs. I don't let my sub's problems become my problems. Works for me. Your mileage may vary.


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## Stateline

QC the work, if its correct then pay them what they earned and are owed. They'd have to be crazy for signing that contract anyway.


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## 68W30

50 percent for one day ?? 

Did you write the operations and procedure codes for the nationals ??


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## BPWY

BRADSConst said:


> After all, your sub worked for you. Not your client.
> 
> Just my $0.02 worth







Thats how I've always ran the odd job where I have a sub.


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## wmhlc

What was the work for? In michigan you can't lien a property for service work only improvement work.

Check your state laws


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## SwiftRes

Making a sub wait 90-120 days is ridiculous. 

Please tell me what national takes 90-120 days to cut invoices. I have never worked for a national that took longer than a couple of weeks to cut an invoice on a job due to CYD count, etc.

Chargebacks for missing something are another story, and can happen at any point in future, so still no benefit to holding money.

We pay subs in 30 days at most, some quicker if it's a small job. We get paid in ~45. 30 days is enough time to get the order through the nationals QC process. We sub maybe 5-10% of our business.


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## SwiftRes

Doberman Properties said:


> I have been through this a few times and like you we hold final payment for a minimum of 90 days. We also are indemnified and held harmless the same as our clients. It is much harder to lien a property than most would have you believe. Once the lien has been filed it still has to be perfected and must hold up in a judges eyes. The fact that neither of you has a contract is just as good for you as it is bad.
> 
> In most of these cases the sub needs the money so you will find them more willing to settle. Justify your position through facts make a final offer, with that offer attach a final lien waiver and a statement for them to sign stating this is it. Write them a check and be done.


I'm confused here. Are you saying you will hold subs payments for 90 days, hoping they will be desperate for money and settle for a lesser amount? That would have to be the lowest of the low in business practices.


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## tak

I hold last payment for 90 days min. I've worked for a few companies where the last payment is 60 days out. No big deal deal because I might only be owed a few hundred. In this case I had this Sub refuse work in mid-jan because she did not have the capital to operate. Not my problem, if I told my clients I am having a money problem and can't work for a week, maybe 2, what will happen........yep they will find another vendor. With this I had to personally go out in the field for 2 days and cover her work. I should charge her a reassignment fee per order, but I haven't.
On the topic of 50 percent for 1 day late and 100 percent for 2 days late...I'm sorry but I'm one of those that want a perfect scorecard and I don't want late work. My subs don't get the calls and emails from clients asking about late work, I do !!! Besides that it gives me a better chance to expand with my existing clients. Basically get the work in on time and there isn't a problem. If your having an issue with say your equipment or truck... let me know and I won't discount. 
I am not having a money issue myself or an issue with my client at all. Simply my client doesn't pay for late work and if I'm held to that I am surely going to pass it down.
My subs are paid every week. Paid pretty good I think. No special software to download orders or anything. We Just simply use Dropbox for everything and the sub sends me invoices. which upon auditing I have found this sub never discounted her work according to the penalities. I have sent her audited invoices the other day and she complained saying "how can you discount me 50 % on a few orders that were sent to me at 630 am due for that day? , which we did the next day" I said I'm sorry my clients want same day turn around on a few orders and if not in I get discounted by them and these few orders are litterally in the same zipcode you live in and are just simple grass cuts orders. She didn't say anything back.
I'll always pay out what is rightfully owed not a question, but this lady called my client 5-6 times a day for 3 days straight, lying right to the clients saying she is owed $7k when after auditing her invoices (I wasn't even going to discount her invoices and I never did intill she started calling my client and making threats to "make sure my client ceases to give me work") Then it just pissed me off and I said fine I will discount her based upon my what my contract states.


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## brm1109

Trying to discount because the order was received in the morning and not turned in till the next day, really?
I don't want to appear combative but, there is no way that you can expect to send an order in the morning and have it done the same day. So in other words you want this person to be available 24 hours a day and not be able to schedule any other jobs for their company (sounds like an employee if you ask me).
We have a policy that any order received after 6PM the night before is considered not received until the following day. As a business owner we need to schedule our days. Sure there might be once or twice that a client may ask us to go the same day but they ask first and if we agree there is an additional emergency trip fee and if we can't then we tell them there is no such thing as forcing an independent contractor to do it.
I am sorry but in my eyes and I have been around a while, it sounds like you are looking for reassurance, but there is no justification for holding money that long. If I was the vendor there would probably be a knock on your door.


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## SwiftRes

tak said:


> No big deal deal because I might only be owed a few hundred. In this case I had this Sub refuse work in mid-jan because she did not have the capital to operate. Not my problem, if I told my clients I am having a money problem and can't work for a week, maybe 2, what will happen........yep they will find another vendor.


Of course you wouldn't have a money problem. You are using your subs money as a bankroll! 

Sorry but in this scenario you are wrong. In mid-Feb(30 days) you should have paid her what was owed and been done with it. There is nobody winning in this situation. She's hurting for money and you are taking it away from her, you are getting additional stress due to her actions. Where is the BENEFIT in doing what you are doing?


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## BPWY

SwiftRes said:


> Of course you wouldn't have a money problem. You are using your subs money as a bankroll!
> 
> Sorry but in this scenario you are wrong. In mid-Feb(30 days) you should have paid her what was owed and been done with it. There is nobody winning in this situation. She's hurting for money and you are taking it away from her, you are getting additional stress due to her actions. Where is the BENEFIT in doing what you are doing?






I see both sides to the issue.


In any case business is business and you can be sure that if it was Tak having this discussion with his national client there'd be no mercy.


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## SwiftRes

BPWY said:


> I see both sides to the issue.
> 
> 
> In any case business is business and you can be sure that if it was Tak having this discussion with his national client there'd be no mercy.


Just because someone else would do it doesn't mean we should. 

I agree business is business. I feel people get emotions involved too much. It sounds like tak is more upset that this sub couldn't do any more jobs for him and he had to go out and do them himself and he is angry about that. But, business is business, they did a job they get paid for said job regardless if you are angry or not. 

I still haven't heard a valid business reason that payment needs held for 90 to 120 days.


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## BPWY

SwiftRes said:


> I still haven't heard a valid business reason that payment needs held for 90 to 120 days.






I believe what Tak, Doberman and maybe others were referring to in that is they want to make sure there aren't any charge backs coming.

Some one knew they were on the short end of the rope already and sabotage a property or three, then quit and you are left holding the bag while the sub gets off scott free......
I can see holding the last payment as legit, but its got to be in the contract.


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## BRADSConst

BPWY said:


> I believe what Tak, Doberman and maybe others were referring to in that is they want to make sure there aren't any charge backs coming.
> 
> Some one knew they were on the short end of the rope already and sabotage a property or three, then quit and you are left holding the bag while the sub gets off scott free......
> I can see holding the last payment as legit, but its got to be in the contract.


Using chargebacks as a reason to hold money for 90-120 is assinine. There are people on here, that we know, that have had chargebacks come years after the fact. Hell, anyone doing this long enough should know per client what dollar percentage of our invoices will be cut or chargedback. Does that give me the right to withhold my subs money indefinitely "Just in case"? He!! No.

I still go back to my previous statement. It is your job to QC the work of those you employ or sub to. Plain and simple. Waiting because "your client" may issue a chargeback is irrelevant.

This is a case in point for why this business sucks! Everyone from nationals through regionals through contractors subbing to their subs does NOT WANT ANY LIABILITY. I guess that's a great business model as long as you aren't the last in line. But then my question is why do these people take such high percentages off the top? Just because you can? Just because you got approved by the regional or national? BS when I've subbed P&P work, my guys got paid after I QC'd it. If they were on 30 day terms, or money was withheld pending a dispute, I was working on a 10% margin for their work. They did the work, why should I keep 20-25% for shuffling photos?

Also, for what its worth, I don't care if someone asks me to mow my neighbors lawn after I receive a work order at 6:30 in the morning. I do not sit around all day praying that some national calls me to do work. I may do the work if time permits or equipment happens to be in the vicinity but no way I'm taking a discount for it being late. Plain and simple, FAILURE TO PLAN ON YOUR PART DOES NOT CONSTITUTE AN EMERGENCY ON MY PART.........


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## Sicoupe06

Even SG doesn't cut my invoices 50% for 1 day late. Only until the 3rd day and that's only 10%.... just sayin'


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## GTX63

BPWY said:


> I believe what Tak, Doberman and maybe others were referring to in that is they want to make sure there aren't any charge backs coming.


You cannot ensure against chargebacks. You are in an industry laden with crooks. By saying that you can prevent them is to assume you have control over the issue, and that the chargebacks you did recieve were legitimate. The first time we were denied a sales clean invoice over a dusty water heater, and a qtip above a kitchen cabinet, I was willing to do a search on the QC inspector and drive up to Wisconsin and sit outside his house all night. The job of the boss (you) is to make sure the people you hired to do the job did it right; that means getting out and visually confirming it. Once you have done so, the moral and ethical thing you do is pay the people you hired to do work. If you cannot determine that your people did the job as they should have, then what else is there to say? What about their work will change from day 1 to day 120 that will cause you to not pay them? If you are hiring people that are unreliable and are ill qualified, then why continue to use them and then penalize them? Isn't that about the same MOP as the Nationals? This is REO/P&P...you can't ensure against chargebacks.


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## RichR

:wallbash:

I just can't believe I'm reading this crap.
For christ sake get off your arse and QC this poor bastards work that you owe her for and pay her already. WTF


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## Cleanupman

tak said:


> 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.


If you have no contract signed with this gal she is your employee....pay her and get her out of your hair before you have major issues you don't want to deal with.....


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## BPWY

RichR said:


> :wallbash:
> 
> I just can't believe I'm reading this crap.
> For christ sake get off your arse and QC this poor bastards work that you owe her for and pay her already. WTF





That would be the gentlemanly thing to do even if you had a signed contract in place.


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## Craigslist Hack

SwiftRes said:


> I'm confused here. Are you saying you will hold subs payments for 90 days, hoping they will be desperate for money and settle for a lesser amount? That would have to be the lowest of the low in business practices.



I am not saying that. What I am saying is anyone that leaves without giving 30 day prior WRITTEN notice as per our contractual agreement will have their last payouts held for 90 days against chargebacks. I have been burned to many times by guys that leave debris, place dehumidifiers in properties then remove them, etc. We cannot go behind and personally QC every job and if I were going to do that I would be better off doing the job myself and keeping the pay. We all know the pay in this industry is too low we certainly don't have the cushion to make an extra QC trip for every work order.

If a sub does his or her work correctly and follows our contract we have no issues. The problem is most of these subs promise the moon when you are hiring them and do the first few jobs very well. Then they start to fade and their coverage area gets smaller and smaller. Then they want to do grass cuts only and next thing you know they are broke and can't figure out why?


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## Craigslist Hack

SwiftRes said:


> Of course you wouldn't have a money problem. You are using your subs money as a bankroll!
> 
> Sorry but in this scenario you are wrong. In mid-Feb(30 days) you should have paid her what was owed and been done with it. There is nobody winning in this situation. She's hurting for money and you are taking it away from her, you are getting additional stress due to her actions. Where is the BENEFIT in doing what you are doing?


You are obviously only seeing this from the contractors perspective. 

He is doing exactly what he should do. He is not bank rolling with the subs money that is an absolutely ridiculous assertion. He has not been paid yet so technically the national still has the money. We often times do not see payment from some of our nationals for 60-120 days anymore and it is very hard to gauge what chargebacks may be hanging out there. In most cases we are visiting these properties again for PCR's or some other work order and we can find out what the true condition is if we are able to determine that all is well we release the payment as soon as we are paid. 

The subs I use are all paid 40% the week after they do a job. We hold the other 60% until we are paid. Technically I am BANKROLLING their company by paying ahead. I do this to try and help them with their cash flow.

We use very few subs and are trying to convert to strictly employees. The employee model is so much easier. We are finding this is working both for the contractor and for us as a company.

There have been times I just pay a sub to go away even if I had to go fix his mistakes myself. The question is where does that money come from and how many times should I do that?

It's a tough business and you can't carry everyone.


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## BRADSConst

Doberman Properties said:


> You are obviously only seeing this from the contractors perspective.
> 
> He is doing exactly what he should do. He is not bank rolling with the subs money that is an absolutely ridiculous assertion. He has not been paid yet so technically the national still has the money. We often times do not see payment from some of our nationals for 60-120 days anymore and it is very hard to gauge what chargebacks may be hanging out there. In most cases we are visiting these properties again for PCR's or some other work order and we can find out what the true condition is if we are able to determine that all is well we release the payment as soon as we are paid.
> 
> The subs I use are all paid 40% the week after they do a job. We hold the other 60% until we are paid. Technically I am BANKROLLING their company by paying ahead. I do this to try and help them with their cash flow.
> 
> We use very few subs and are trying to convert to strictly employees. The employee model is so much easier. We are finding this is working both for the contractor and for us as a company.
> 
> There have been times I just pay a sub to go away even if I had to go fix his mistakes myself. The question is where does that money come from and how many times should I do that?
> 
> It's a tough business and you can't carry everyone.


So do you pay your employees 40% wages for the week they work and 60% of their wages when you are paid?

The money to "pay subs to go away" or fix the mistakes comes from your margins. That's why you take a percentage off their work.

I guess I look at it differently. I beleive "Technically" you are bank rolling your client. Not your sub. If your sub, which in terms means your company completed the work, who is bank rolling who? Your sub did the job and deserves to be paid. You got the job done and deserve to be paid. Who got the free loan? In my view, your client did.


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## SwiftRes

Doberman Properties said:


> You are obviously only seeing this from the contractors perspective.
> 
> He is doing exactly what he should do. He is not bank rolling with the subs money that is an absolutely ridiculous assertion. He has not been paid yet so technically the national still has the money. We often times do not see payment from some of our nationals for 60-120 days anymore and it is very hard to gauge what chargebacks may be hanging out there. In most cases we are visiting these properties again for PCR's or some other work order and we can find out what the true condition is if we are able to determine that all is well we release the payment as soon as we are paid.
> 
> The subs I use are all paid 40% the week after they do a job. We hold the other 60% until we are paid. Technically I am BANKROLLING their company by paying ahead. I do this to try and help them with their cash flow.
> 
> We use very few subs and are trying to convert to strictly employees. The employee model is so much easier. We are finding this is working both for the contractor and for us as a company.
> 
> There have been times I just pay a sub to go away even if I had to go fix his mistakes myself. The question is where does that money come from and how many times should I do that?
> 
> It's a tough business and you can't carry everyone.


You are not bank rolling the sub. You are paying for work that they already have out of pocket cost in completing. Bank rolling them would be paying them before the job is complete.

Where does money come from to pay a sub early? Working capital. Let's say you want a sub to do debris for 20/cyd that costs them 15. They remove 50 cyd of debris. You expect them to spend $750 of their own money up front to make a 25% margin, wait 60 to 90 days for payment for probably the same margin you are making with zero out of pocket. Now doing the 40% up front just shares the working capital burden with them but you haven't even covered their cost most likely. 

My philosophy has always been that if we have a good sub that does a good job making us money but doesn't have working capital, pay them early and keep them going. 

One regional that has always done a great job of this is US best. Their pay isn't the best but they pay in 10 days which is well before their client pays them. I have done lamco work for them which I know pays 90+ days but they still pay me in 10.


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## danny1217

After reading a little more, I get a better sense of the subs in queston. I still don't agree with holding payment that long but I'm coming from using subs like electricians, plumbers, roofers, etc. I pay 50% up front if needed, and balance when done. For smaller jobs, total due when their done. Have had the same subs for years and I make it a point to QC the jobs personally. Going to meet a sub tomorrow morning who's finishing up a vinyl fence job. Will pay him on the spot, in full, for work completed.


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## JFMURFY

That's the nature of this business to get it done right...ya gotta pay to play...and if you're lucky ya won't get squeezed when you go after your cash.


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## tak

As a contractor, I hate it when companies withhold payment for me for an extended period of time, but likewise I do the same just as one person had mention earlier. Anyways long story short- I've offered the sub in question a full payout split into 2 lump sums (400 each time) This would lead up to my companies policy of waiting till 90 days atleast. I have to treat them all fair.
I also included a partial waiver of lien rights for the 1st pay out and then a full waiver of lien rights for the last payout. 
She sends me bi-monthly invoices and Upon a full audited she was found to have alot of late work and it was discounted accorded to policy. Sub claims to be owed twice the amount of the audited amount and would only like to accept 2 installments, 1st $1400 and the 2nd $200 ! Plus she said "If this is not agreed on I will start legal action this week along with interest per day on each lien will be placed. I would rather start proceedings and add court costs along with interest for the time, than to get payment only distributed out to me." 
Problem is that in the State of Florida you can't lien properties for lawn mowing services. This is what makes this arguement:
? Florida law requires that in order to have lien rights, the contractor (lienor) must have “improved” the property.
Improved is defined as (Section 713.01(14)):
“…build, erect, place, make, alter, remove, repair, or demolish any improvement over, upon, connected with, or beneath the surface of real property, or excavate any land, or furnish materials for any of these purposes, or perform any labor or services upon the improvements, including the furnishing of carpet or rugs or appliances that are permanently affixed to the real property and final construction cleanup to prepare a structure for occupancy; or perform any labor or services or furnish any materials in grading, seeding, sodding, or planting for landscaping purposes, including the furnishing of trees, shrubs, bushes, or plants that are planted on the real property, or in equipping any improvement with fixtures or permanent apparatus or provide any solid-waste collection or disposal on the site of the improvement.”
If the question remains after reading that definition, the 4th District Court of Appeals has provided an example upon which to provide more criteria for analysis. In _Legault vs. Suncoast Lawn Service, Inc_., (April 9, 1986) the Court stated that “an improvement, in order to support a mechanic’s [contractor] lien, must result in a permanent benefit to the land or the real property [building].” From the facts in that case, the contractor had mowed the property owner’s lawn and trimmed their shrubbery, and thereafter filed a lien for “lawn service.” The Court found that, although planting for landscaping purposes may be a permanent improvement, landscape maintenance services did not.



With that said she can not properly lien a property that is bank owned as all she did was cut the yard. I'm ready to settle her account but not at her terms. If she would stop her bullsh!t today I would even pay her off right now in full, but sounds like she wont compromise.


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## Craigslist Hack

BRADSConst said:


> So do you pay your employees 40% wages for the week they work and 60% of their wages when you are paid?
> 
> The money to "pay subs to go away" or fix the mistakes comes from your margins. That's why you take a percentage off their work.
> 
> I guess I look at it differently. I beleive "Technically" you are bank rolling your client. Not your sub. If your sub, which in terms means your company completed the work, who is bank rolling who? Your sub did the job and deserves to be paid. You got the job done and deserve to be paid. Who got the free loan? In my view, your client did.


I pay employees 100% of their wage each Friday we are a week off which is traditional.

So let me get this straight your contention is that monies from my margins should go to pay for a sub or a subs mistakes even though they signed a contract stating that we could hold their last payment for 90 days?



sub leaves debris in property we get charged back: "no worries that's what margins are for!":thumbsup:
Sub places paint cans and propane tanks in crawl space to avoid disposal fees: "no worries that's what margins are for!":thumbsup:
Sub misses mold in closet on initial secure we end up putting new roof on property and remediating mold at our own cost: "no worries that's what margins are for!":thumbsup:
Sub takes debris from one property and dumps it at another to avoid dump fees: "no worries that's what margins are for!":thumbsup:
Sub turns in all work late and it is not done correctly we paid nothing by client but sub still wants paid: "no worries that's what margins are for!":thumbsup:
Sub uses 2"X4" lumber for joists instead of 2"X6" to save money and roof falls in: "no worries that's what margins are for!":thumbsup:
If this is part of your get rich slow program it will work!


As for our company if you work for us you do a good job or there will be consequences. The only thing I have to hold these guys accountable is money. I can't drive to Savannah, GA from Evansville, IN to QC an initial secure.


You guys have a different set of problems as a contractor in a truck or servicing a small area than we do. There are two sides to this issue.


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## Craigslist Hack

danny1217 said:


> After reading a little more, I get a better sense of the subs in queston. I still don't agree with holding payment that long but I'm coming from using subs like electricians, plumbers, roofers, etc. I pay 50% up front if needed, and balance when done. For smaller jobs, total due when their done. Have had the same subs for years and I make it a point to QC the jobs personally. Going to meet a sub tomorrow morning who's finishing up a vinyl fence job. Will pay him on the spot, in full, for work completed.


That is great but not practical for many companies. Many of our jobs are 4 to 5 hours or further away. 

We never have any issues with tradesman it's always preservation contractors. Never once have I had an issue with a demo guy, or an electrician, or HVAC person. It's always the daily contractors.


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## Craigslist Hack

SwiftRes said:


> You are not bank rolling the sub. You are paying for work that they already have out of pocket cost in completing. Bank rolling them would be paying them before the job is complete.
> 
> Where does money come from to pay a sub early? Working capital. Let's say you want a sub to do debris for 20/cyd that costs them 15. They remove 50 cyd of debris. You expect them to spend $750 of their own money up front to make a 25% margin, wait 60 to 90 days for payment for probably the same margin you are making with zero out of pocket. Now doing the 40% up front just shares the working capital burden with them but you haven't even covered their cost most likely.
> 
> My philosophy has always been that if we have a good sub that does a good job making us money but doesn't have working capital, pay them early and keep them going.
> 
> One regional that has always done a great job of this is US best. Their pay isn't the best but they pay in 10 days which is well before their client pays them. I have done lamco work for them which I know pays 90+ days but they still pay me in 10.


and where is US Best today?

If my sub needs help with material or equipment we help them. If they don't have working capital it really depends on how long they have been with me. If they are a good sub they should have money banked it's that simple. If they are new they shouldn't be getting into this business without some working capital. We help guys plenty and most times we get burned. I bought on sub a mower and another a truck last year.


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## Wannabe

Doberman,

I hate to say it but yes thats what margins "P&O" are for. The better your subcontractor the better your P&O. This is the exact reason, after intense legal council, we quit the multiple State servicing. I've had to drive to SC to pickup debris that a sub threw in ditches/woods to forgo landfill fees. Upsetting? Heck yes but as the GC of record YOU are responsible.


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## Craigslist Hack

Wannabe said:


> Doberman,
> 
> I hate to say it but yes thats what margins "P&O" are for. The better your subcontractor the better your P&O. This is the exact reason, after intense legal council, we quit the multiple State servicing. I've had to drive to SC to pickup debris that a sub threw in ditches/woods to forgo landfill fees. Upsetting? Heck yes but as the GC of record YOU are responsible.


I don't disagree with you but I will be damned if we are going to pay the sub to screw up then get charged back by the client.

I disagree with you on what our P&O are FOR. Your P&O may be for this but ours is for our company. 

Go down to your local college and tell the business professor that you intend to run a business where you pay people to screw up then your client charges you back more than you made. See if he thinks that is what P&O is for?


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## Wannabe

I understand the margins and trying to keep profits. But those chargebacks are a part of the overhead cost or the cost of doing business. I will be the 1st to admit I did not run off a normal P&O rate that construction contractors would (normally 10/10 or 15/10 on P&O). On the P&P we marked up 25/25 to offset the overhead liabilities. 

I know the business model has changed so much in the last 2 years that its nearly impossible to pass these costs on and the reason for the "good responsible contractors" leaving the industry.

I would be scared to go to a local college business course class and speak of the P&P business model....they would send you to the Psych classroom for even being in a business that runs like the way the industry is today....


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## BRADSConst

Doberman Properties said:


> I pay employees 100% of their wage each Friday we are a week off which is traditional.
> 
> So let me get this straight your contention is that monies from my margins should go to pay for a sub or a subs mistakes even though they signed a contract stating that we could hold their last payment for 90 days?
> 
> 
> 
> sub leaves debris in property we get charged back: "no worries that's what margins are for!":thumbsup:
> Sub places paint cans and propane tanks in crawl space to avoid disposal fees: "no worries that's what margins are for!":thumbsup:
> Sub misses mold in closet on initial secure we end up putting new roof on property and remediating mold at our own cost: "no worries that's what margins are for!":thumbsup:
> Sub takes debris from one property and dumps it at another to avoid dump fees: "no worries that's what margins are for!":thumbsup:
> Sub turns in all work late and it is not done correctly we paid nothing by client but sub still wants paid: "no worries that's what margins are for!":thumbsup:
> Sub uses 2"X4" lumber for joists instead of 2"X6" to save money and roof falls in: "no worries that's what margins are for!":thumbsup:
> If this is part of your get rich slow program it will work!
> 
> 
> As for our company if you work for us you do a good job or there will be consequences. The only thing I have to hold these guys accountable is money. I can't drive to Savannah, GA from Evansville, IN to QC an initial secure.
> 
> 
> You guys have a different set of problems as a contractor in a truck or servicing a small area than we do. There are two sides to this issue.


I will agree that you have a different set of problems than I do based, on location, coverage area and many other variables.

What I don't agree with is how all the risk appears to be placed on the guy or gal at the end of the line. While you may not personally be able to check every property and every work order, there are ways to solve this. Afterall, somehow your client, who probably covers the nation figured it out didn't they? That's how they are charging you back. In my situation, I have had different subs or employees go to the same property for different reasons. I have personally had myself or my son go out and inspect work that is done. If my business need justified it, plenty of people are scratching at $10 inspections and you could probably pick them as a sub, that may be one of the costs of doing business based on your situation.

As for the 6 reasons you list above, no that's not what your P&O margins are for. However, if those are valid examples, you probably aren't getting the best subs or can't afford ones that take pride in doing a good job correctly and profitably for them.

For me personally, and this is no reflection on anyone on this board, I don't ever want see chargebacks for illegally disposing of debris, violating codes, etc. It looks poorly on me and my company. My clients hired me and my company, not my subs. Nor do they know that my sub screwed up. I take pride in my work. I expect anyone who recieves money from me to do the same, I don't care if they are an employee or a sub. When things go wrong, and they do go wrong for me, the FIRST thing I ask is what did I DO WRONG? Is it lack of training? Is it lack of oversight? Is it a service I can't do profitably and therefore can't expect them to (I believe you don't offer sales cleans for this very reason)? Is this person/company a good fit for me and my company?

I'm not throwing stones at any individual, you included. This entire business model is made from too many people/companies expecting to make money without assuming any liability, and yes this does include the guy illegally dumping trash to save a buck. That is one of the reasons I'm on my way out of preservation. It's less than 10% of my revenue and I have no plans to take on anymore clients.


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## danny1217

Doberman Properties said:


> That is great but not practical for many companies. Many of our jobs are 4 to 5 hours or further away.
> 
> We never have any issues with tradesman it's always preservation contractors. Never once have I had an issue with a demo guy, or an electrician, or HVAC person. It's always the daily contractors.


Agreed...totally different circumstances. I don't do P&P work. Tried it with a few regionals/nationals for maybe a year to possibly expand my business but became obvious it's not profitable enough, too many headaches. (exception for Wells fargo, really good to work with). Settled back into landscape/lawncare and repair/rehab. 45 min service area, able to oversee jobs, etc. I consider myself one of the lucky ones who can make that business decision and still put food on the table without selling my soul to those who seem to have alot of decent people by the short hairs.


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## Craigslist Hack

BRADSConst said:


> I will agree that you have a different set of problems than I do based, on location, coverage area and many other variables.
> 
> What I don't agree with is how all the risk appears to be placed on the guy or gal at the end of the line. While you may not personally be able to check every property and every work order, there are ways to solve this. Afterall, somehow your client, who probably covers the nation figured it out didn't they? That's how they are charging you back. In my situation, I have had different subs or employees go to the same property for different reasons. I have personally had myself or my son go out and inspect work that is done. If my business need justified it, plenty of people are scratching at $10 inspections and you could probably pick them as a sub, that may be one of the costs of doing business based on your situation.
> 
> As for the 6 reasons you list above, no that's not what your P&O margins are for. However, if those are valid examples, you probably aren't getting the best subs or can't afford ones that take pride in doing a good job correctly and profitably for them.
> 
> For me personally, and this is no reflection on anyone on this board, I don't ever want see chargebacks for illegally disposing of debris, violating codes, etc. It looks poorly on me and my company. My clients hired me and my company, not my subs. Nor do they know that my sub screwed up. I take pride in my work. I expect anyone who recieves money from me to do the same, I don't care if they are an employee or a sub. When things go wrong, and they do go wrong for me, the FIRST thing I ask is what did I DO WRONG? Is it lack of training? Is it lack of oversight? Is it a service I can't do profitably and therefore can't expect them to (I believe you don't offer sales cleans for this very reason)? Is this person/company a good fit for me and my company?
> 
> I'm not throwing stones at any individual, you included. This entire business model is made from too many people/companies expecting to make money without assuming any liability, and yes this does include the guy illegally dumping trash to save a buck. That is one of the reasons I'm on my way out of preservation. It's less than 10% of my revenue and I have no plans to take on anymore clients.


I think we are saying the same thing basically just from a different perspective. The business model sucks! It creates too many layers and if you have to go behind to verify what someone does it cuts into what little profit you have. We do not want subs doing the kinds of things I have described above but we have seen it. Not just with our guys but with our competition as well. It's a tough business and getting tougher. We are searching for a better way.

I cannot oversee every job personally and there is not enough profit to hire our own inspector. We do not ask our subs to do anything we won't do ourselves. We have a few really good subs and are transitioning to employees. The employees seem to be doing a great job but they take longer on most jobs than a sub would. 

If you have the ANSWER let me know.


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## BRADSConst

Wannabe said:


> I know the business model has changed so much in the last 2 years that its nearly impossible to pass these costs on and the reason for the "good responsible contractors" leaving the industry.





Doberman Properties said:


> If you have the ANSWER let me know.


Doberman, I personally subscribe to the answer Wannabe posted. I consider myself to be one of the "good responsible guys" on the way out of this industry. Diversify is taking time, effort, money for marketing, etc. But in the long run, I know I can't maintain my quality of work at the bargain basement P&P prices. I personally, both ethically and morally, can not become the "hack". The only other option is going where my skills and quality are both appreciated and compensated.....:thumbsup:


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## Craigslist Hack

BRADSConst said:


> Doberman, I personally subscribe to the answer Wannabe posted. I consider myself to be one of the "good responsible guys" on the way out of this industry. Diversify is taking time, effort, money for marketing, etc. But in the long run, I know I can't maintain my quality of work at the bargain basement P&P prices. I personally, both ethically and morally, can not become the "hack". The only other option is going where my skills and quality are both appreciated and compensated.....:thumbsup:


I agree with that assessment, the problem is we run a window, siding, and door company already, and I HATE dealing with people. The whole reason we got into P&P was to get away from the general public. I have liens on about 12 properties for various reasons mostly non payment from past jobs. We will probably do 100 or so residential jobs this year and I will bet 5 don't pay out correctly. The numbers are probably still better than P&P but for whatever reason it gets under my skin worse.

I don't work in the field that much these days and prefer not to at all. We are transitioning to buying and flipping our own properties. The only people I have to deal with then are the guys doing work for me and I can fire them if I don't like their attitude.

I truly believe the more people you involve in anything the bigger the headache.:thumbup:


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## BRADSConst

Doberman Properties said:


> I agree with that assessment, the problem is we run a window, siding, and door company already, and I HATE dealing with people. The whole reason we got into P&P was to get away from the general public. I have liens on about 12 properties for various reasons mostly non payment from past jobs. We will probably do 100 or so residential jobs this year and I will bet 5 don't pay out correctly. The numbers are probably still better than P&P but for whatever reason it gets under my skin worse.
> 
> I don't work in the field that much these days and prefer not to at all. We are transitioning to buying and flipping our own properties. The only people I have to deal with then are the guys doing work for me and I can fire them if I don't like their attitude.
> 
> I truly believe the more people you involve in anything the bigger the headache.:thumbup:


It sucks when jobs don't pay out correctly. But I don't use that as a reason to shy away from the general public. I use that as a motivation to find ways to better qualify who I work for. I'm small enough that I personally meet the owner of the project, even if I'm not personally the one wearing the tool belt. When I look back at jobs that haven't gone well, I start looking for the "signs" that were there, I just didn't pay close enough attention at the time. Gut feelings only let me down when I don't listen to them. :thumbsup: I've also learned not to take the bad jobs personally. I try to focus on the good ones. Like the ones where the homeowner makes you and the crew a 4 course meal when your done. Those are the people I stay in contact with. Those are the people I use for referals. Generally, not all cases mind you, those type of people tend to associate with one another. The homeowner who turns out to be an absolute jackwad tends to associate with like minded people. When referals come from that direction, I bid them with the special PITA factor so if I get the job, I know I'm being paid for all the bullchit that comes with it.

I too would love to do more flipping. However, my recent past has me buying, fixing and renting. I don't mind that too much, but that brings its own set of hassles as well. I love the game of monopoly, but there you almost always collect $200 for passing go, as I type this, I'm still one rent check short for this month. I don't like it, by I can't take it personally. It is part of the business. When leases come due, bad debt will play into account for who gets renewed and what the rent rate will be when they renew. I don't get mad, I just get even.

I do agree the more people involved, the larger the headaches become. That's why I know my my annual revenues won't surpase a certain amount. I have made the decision that I will only grow my company so big.


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## Craigslist Hack

BRADSConst said:


> It sucks when jobs don't pay out correctly. But I don't use that as a reason to shy away from the general public. I use that as a motivation to find ways to better qualify who I work for. I'm small enough that I personally meet the owner of the project, even if I'm not personally the one wearing the tool belt. When I look back at jobs that haven't gone well, I start looking for the "signs" that were there, I just didn't pay close enough attention at the time. Gut feelings only let me down when I don't listen to them. :thumbsup: I've also learned not to take the bad jobs personally. I try to focus on the good ones. Like the ones where the homeowner makes you and the crew a 4 course meal when your done. Those are the people I stay in contact with. Those are the people I use for referals. Generally, not all cases mind you, those type of people tend to associate with one another. The homeowner who turns out to be an absolute jackwad tends to associate with like minded people. When referals come from that direction, I bid them with the special PITA factor so if I get the job, I know I'm being paid for all the bullchit that comes with it.
> 
> I too would love to do more flipping. However, my recent past has me buying, fixing and renting. I don't mind that too much, but that brings its own set of hassles as well. I love the game of monopoly, but there you almost always collect $200 for passing go, as I type this, I'm still one rent check short for this month. I don't like it, by I can't take it personally. It is part of the business. When leases come due, bad debt will play into account for who gets renewed and what the rent rate will be when they renew. I don't get mad, I just get even.
> 
> I do agree the more people involved, the larger the headaches become. That's why I know my my annual revenues won't surpase a certain amount. I have made the decision that I will only grow my company so big.


Good stuff man!

One thing I really like about this forum is that even when guys don't necessarily see eye to eye on issues they can usually find common ground and realize that our markets and our businesses are different. 

We have been downsizing to get where we want to be and the first thing I notice is every Thursday when we do payroll I don't have a huge headache like before. We pay close to the same every Friday now and the only fluctuations are the big jobs here and there. Before it was always a headache with guys waiting for jobs to net out or someone getting back charged and I would have to call and prepare them for it. Nowadays thinga are getting smoother and smoother every week. I feel like we are on the way to becoming the company we want to be. I feel the first couple of years we wanted to be like other companies so we followed their model. Now we are trying to be our own company and we are in the process of building our own model.:thumbsup:


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