Getting Paid for services

Discussion in 'Growing and Managing a Business' started by lmgaiter, Sep 29, 2010.

  1. lmgaiter

    lmgaiter
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    I'm a roofer with little work these days. A friend of a friend suggested if I would reroof his house, which is presently up for sale, he would pay me 1 1/2times my normal rate for the job when the house sold or six months from now whichever happens first. He's willing to put this in writing.

    My problem is he live about fifty miles away, how will I know if he sells his house. I thought of having him give me a check for the amount owed without a date, once the house is sold I would fill in the date and submit the check to my bank.

    Is this a legal option? Does anyone have any ideas or suggestions?
     
  2. daytrader

    daytrader
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    lolz..
    but there is a hardcopy of papers so i guess its legal :D and i hope he really pays :D
     
  3. Kay

    Kay
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    The thing is, once he sells the house any repair costs would be even harder to get out of him.

    The guy could approach his bank for a home improvement loan or overdraft and make an arrangement with them.

    You're going to be out the cost of materials and labor on this and not see a penny for six months minimum. You may never get it. One and a half times nothing is still nothing.

    I'd not risk it. If he was to sell his house and vanish overnight, anything you had in writing would be worthless if you don't know where he is. And if your friend objects, suggest to him that he pays it and then he can collect it from his friend if he's so sure he would. Tell him it's nothing personal. It's a business decision. You wouldn't give anyone else six months to pay for work, would you?

    Don't get sucked into believing you need to do him any special favors because he's a friend of a friend. It's nice to but not when it's more risky than not. That's not a small job. If you want to do it, only do it if you can handle the risk of never getting paid for what you've spent on materials and so on.

    I'd suggest you focus instead on advertising and making contacts. We'll help you best we can with advice on what to try. Let us know what you've tried to date to drum up business and we can go from there. And welcome! :D
     
    #3 Kay, Sep 30, 2010
    Last edited: Sep 30, 2010
  4. Michael.golb

    Michael.golb
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    :cool: the risk for 6 month time and money invest 4 just a guaranteed check seems 2 B 2 high
     
  5. Fergal

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    Welcome to Business Advice Forum lmgaiter, thanks for joining and posting your business questions. Unfortunately business is tough in construction related sectors and many people find themselves doing work and entering into arrangements that they would steer clear of in busier times.

    Is there any way that you can minimise the risk by getting paid some of the money up front? For example if the customer was prepared to pay for materials up front, at least you would only be risking your labour and not damage your cash flow.

    There is always the risk that the house won't sell, or sell for a lot less than your customer expects, and hence him not having enough money to pay you. If the house doesn't sell, how is the customer intending to get the money together within the next six months?

    You asked about how you would know if the house sells. If the house is listed by an estate agent, you could check their website, if it's listed there you will be able to keep an eye on the sale locally. Has this person got any source of income at the moment? If he has, perhaps he could make the payments over a few months and give you a post dated cheque for each monthly payment. If you got some of the payment up front, this would further reduce the risk to you.

    As Kay suggested, treat it as a business situation. You said that you don't have much work on at the moment. Be careful that doing this work does not put you in a worse situation than you are already in. It might help to do a little reference checking on the customer to see if he is regarded as an honest and reliable person.

    Good luck with it and please keep us posted, I hope it works out for you.
     
  6. Mountain Man

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    You could put a lien on the house so you are one of the first to get paid when it sells, although this would involve some legal fees.
    Rather than have him leave the date blank on the check have him fill it in with a date 6 months from now, if the house sells before this he can replace the check. If he skips out and the check bounces you have a useless check, which you can add to the written agreement for a court case (if you can find him).
    It all come down to how much you trust people you don't know, for me it's, ... Not much! I like the idea of having him supply materials. I
    would question why he is willing to pay 1.5 times the going rate? is this to pay for the late fee? or because he has no intention of paying it?
     
  7. GekiDan

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    Hello lmgaiter, welcome to BAF!
    Honestly, I wouldn't risk on that type of job, even its on papers.
    If he is really serious, why not pay you after the job is done and not 6 months after that? And from my point of view, he seems to be using your friendship to get a upper hand, and that 1.5x your current rate is just a bait for you.
     
  8. Cathy Duncan

    Cathy Duncan
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    some people ask questions about paid for services.The simplest and easiest thing to do is; to be straightforward. Though it is not as easy as it seems but, once, you make up your mind, you can easily get through it. Explain it to your friend that you need to be paid beforehand. Because this is how things work in your business. Also the materials would be costly, and you have to pay for it to the suppliers. Since, six months, is a long period and they shall not wait that long.
    So it’s better if he pays now, by taking a loan and providing you with the advance to continue with it. If he is fair he would understand and help you out. Otherwise it’s not worth to take a risk, as you might not get anything but loose time and money.
     
  9. lmgaiter

    lmgaiter
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    Thank you

    Just a word of thanks for all the advice. We changed the agreement so that he would pay for all materails. I will hold on the labor until the house sells or six month whichever comes first.

    The contract was drafted by a local lawyer with interest and recovery fees for not or late payment.

    Thank you again.
     
  10. Fergal

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    That sounds much more positive lmgaiter, good luck with it. Please post back in the future to let us know how things are working out or if you have any further questions. Also please consider joining some of our other discussions and sharing your experience and views with our other members.
     
  11. sigma

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    This is legal but your friend might not agree since you can just fill in the tomorrow date, just as you dont know when the house be sold. In this case, i think either you take the money now or get 1 1/2 times of your normal rate after six month (mean the check date after six date)
     
  12. beancounter

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    You may as well spend the time that you would be taking in fixing up that guy's roof and invest it in door knocking around your local area looking for work.

    If he really needs his roof fixing he would find you the money. It's not worth the effort, stress and trouble to do something on a "promise'

    - Suggest to him that his friend pay you for the job, and he can be paid when the guy's house is sold
     
  13. syed2011

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    If you make an affidavit container all information regarding your house and re construction etc. with govt stamps. would be secured to handle any problem legally .
     
  14. Kay

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    I'm very happy to hear you got it all worked out and took legal advice, lmgaiter. The fact that he was willing to go for that and paying the materials upfront makes me feel that I may have judged him too harshly, but better safe than sorry. Do let us know what happens in the end please and good luck in finding more work. :)
     

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