We have a client who pulled the plug on a project after she realized that it would cost her over $100k for renovation. She wanted to move the kitchen from one room to another and had $30k to do it. but then was really inflexible about getting cheap kitchen cabinets and insisted on getting custom high end ones.
Because of the move, we suggested that she would need to renovate the old kitchen as well as the dining room. She also wanted to redo the floors and the hallway. So we explained to her that it was opening up a new can of worms.
Anyway, we agreed that we would get bids and see what we could eliminate afterwards. Rather than eliminating anything, she decided to just renovate the existing kitchen instead.
We were getting paid hourly for the work. and we didn't give her invoices at the end of each month, but all at once for 3 months. She was upset at the amount. We reduced the hourly rate as a courtesy. She got these invoices in November. She still hasn't paid. She keeps claiming that her husband will contact us, but he hasn't made one phone call.
The reduced amount she now owes is almost $4k. Unfortunately, we don't have a retainer.
What should we do? Her husband is a lawyer of sorts (I think entertainment law). We know that there's small claims court. Does anyone know any lawyers?
Just take her to small claims court. If you can show you are owed money for services performed with a paper trail to back it up its a slam dunk and you don't need a lawyer...
also, you need to invoice every month..even if it is a small amount. Dont work until you get paid from the month before. Tell the client that you will work when you get paid.
Ask for a retainer and sign a contract. If you didnt sign a contract, you might as well not bother. The client can (and may) contact the Architecture Review Board and complain (if you didnt sign a contract). You will get fined by the Architecture Review Board and get your name in the back of their newsletter for violating the professional code (for not signing a contract)
"and we didn't give her invoices at the end of each month, but all at once for 3 months"
lesson 1: never let a client get too far ahead; but i suppose you know that now.
don't feel too bad though - i know someone who designed a house with a construction budget of $1 million and he actually let the client dictate the contract such that he does not get paid until the client closes on their construction loan. he's in the hole for 10 times what you're owed and can do nothing about it but sit back and pray they'll pull the loan after all.
we had a contract, but it is not very thorough. since then, we've obviously updated the contract and now get bigger retainers. also, we aren't licensed as architects, but that's good to know.
i dont do anything with a 2-3 page contract listing materials/time/paint/etc......
gotta cover your ass.... i'm sure we all been burned before and that's that
either small claims and then add interests for late payment.... send a certified letter with invoices and pics and let her know that you are collecting an outstanding debt owed to you for work performed....
or just call vinnie and tiny and some pipe hitting' mofo's
Follow her husband around for a couple of weeks, just to be sure he is not a cheater. If you discover he is then, have a meet up and tell him you know he is cheating on his wife and she owes you $8,000.00
plus expenses, which would be all the time you have dedicated to trailing his lame ass. You should walk away with around twenty grand.
Always invoice monthly and make sure the first invoice is same ie less than $1K then see how long it takes to pay. The worse case you work the next month a bit and if they don't pay you don't work... simple. Three months is way too long to go before you spring an invoice on them..... how would you feel if someone dropped that on you. I'm not supporting her but you have to be more business like and if they can't be you'll get burned everytime.
I had the same experience way back and never been burned again, the key is not to get yourself into a place where the amount is significant enough to mean something. ie I won't sweat $1k but $4k relates to a lot of time and effort.
All good advice above. I especially like snooker's idea of catching the husband - or her - potentially cheating. Kidding!
It is a good idea to tell the client, especially if you've fallen behind on invoicing, that you are sending them an invoice before the bid drawings go to the printer. If they don't pay, you don't release the drawings for bids. It's hard, I know - asking for money is the hardest part of our job - but I've also been burned and really we need to be ruthless about getting paid for the work we've actually put in.
When I got burned it was also a lawyer - but we had our own lawyer send a letter and ended up getting 75% of what we were owed, minus a small fee to the lawyer (who is also a friend - we barter).
Useless trivia fact re: Louisville Slugger. The Louisville Slugger is made by the Hillerich & Bradsby Baseball Bat Company. My great-grandfather was Hillerich. Don't ask me what ever happened to the family fortune, though.
if all else fails, put a lien against their house/property for amount owed, so at least you'll get your money if they ever sell their house..
touching on what liberty bell said though, for future projects, in our contracts, it states that all fees for services performed are to be paid in full before any bid sets are released to contractors. when clients get bids back (always high of course) they become surprisingly extra-stingy about their money.
a client can bond around the lien and get out of it if you dont persue the lien. This is where a lawyer's knowledge of the law can get them out of almost anything.
I have always wanted to buy the domain name of clients who have screwed me out of money and set up a website explaining that so and so will fuck you over. I have a knack for Googling anyone that I do business with in order to try to establish some sort of background (call it stalking if you will). Having a website that will tell any future business partners that you cant be trusted would be priceless, IMO
I had a similar situation. It took a while but I got paid
I had a contract. I got a deposit before starting.
When the client decided he wasn't going to need me anymore. He continued using my drawings to get permits and build the project. He had the contractor scribble some details on them to satisfy the permit office. I informed the contractor the client was in breach of my contract for unauthorized use. Copyright laws are a powerful upper hand. Stipulate in your contract that if the client fails to pay the drawings are no longer allowed to be used, copied, distributed or modified, for any purpose. Let the permit office know the client is in a breach of contract. Continue sending invoices with big red letters "2nd notice" "3rd notice " etc... I think most lawyers believe we are afraid of them and will go away. If you weren't authorized by the client to do the work, or performed carelessly, then it will be harder to collect. Don't threaten to go to court unless you are fully prepared to do so. Bottom line, it's a great learning experience whether you like it or not.
too bad about the family fortune, LiG. the hillerich's here still seem to be doing quite well, especially since h&b moved its manufacturing plant back into downtown louisville, which, together with their baseball museum, has become a tourist attraction. jack hillerich seems to be a cool guy.
re: sticking a lien on them, see this thread. If your state allows designer liens, most of the time you can't file until they pull a building permit, plus you need to fulfill lots of paperwork exactly at the right moment- since your practice doesn't seem like it's very good at timely paperwork, you probably already missed the window of opportunity for notifying the client that you have the right to lien. Plus one of them is a lawyer- but what sort of lawyer, only be afraid if they are in real estate law.
I'll repeat, monthly bills are critical anything less is placing yourself in risk for exactly this situation. take this as an expensive lesson or take them to small claims court and hope you have a strong paper trail.
try being owed 250k! answer...we did not release any drawings, or answer client calls until check was delivered. Once construction halted because RFI's and Submittals weren't answered and permit submission was being threatened (potentially costing the client millions in impact fees..) the 250k was just a drop in the bucket.
We could start posting there names here.....or start a website to post non paying clients names.....and charge a small advertising fee....::::
deadbeats.com
so far over the 8 years i've been learning this business...doing models/design/build....... i've been burned about 35,000 or so....but i have wised up since my last burn...
contract+retainer+budget= i will pick up a sharpie and start to design
contract+retainer+.dwgs= i will start the model
it's a bitch when you want to do great work and get jacked for your time....
i had a famous dj try to get me for free design..... i went over to his place that he's renovating...... he has a few guys doing the work but wanted some creative things from me.... well, after past rumors i have heard about him..... he was like "come up with some design ideas and i'll look them over and see if we can work it out"....... in translation that means... free design to give to his other guys to build....... i didnt lift a finger and told him that i needed a budget and timeframe to get this done...and a retainer............. well, that never happened and i see him about 3 times a week or so.......
would be nice to be in the mob or something so i could call cousin vinny to collect my money plus interest...
Feb 9, 08 6:30 pm ·
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clients who don't pay - what to do?
Hi. Any advice would be helpful.
We have a client who pulled the plug on a project after she realized that it would cost her over $100k for renovation. She wanted to move the kitchen from one room to another and had $30k to do it. but then was really inflexible about getting cheap kitchen cabinets and insisted on getting custom high end ones.
Because of the move, we suggested that she would need to renovate the old kitchen as well as the dining room. She also wanted to redo the floors and the hallway. So we explained to her that it was opening up a new can of worms.
Anyway, we agreed that we would get bids and see what we could eliminate afterwards. Rather than eliminating anything, she decided to just renovate the existing kitchen instead.
We were getting paid hourly for the work. and we didn't give her invoices at the end of each month, but all at once for 3 months. She was upset at the amount. We reduced the hourly rate as a courtesy. She got these invoices in November. She still hasn't paid. She keeps claiming that her husband will contact us, but he hasn't made one phone call.
The reduced amount she now owes is almost $4k. Unfortunately, we don't have a retainer.
What should we do? Her husband is a lawyer of sorts (I think entertainment law). We know that there's small claims court. Does anyone know any lawyers?
Thanks!
Just take her to small claims court. If you can show you are owed money for services performed with a paper trail to back it up its a slam dunk and you don't need a lawyer...
dont do work for lawyers..they will try to fuck you anyway they can
also, you need to invoice every month..even if it is a small amount. Dont work until you get paid from the month before. Tell the client that you will work when you get paid.
Ask for a retainer and sign a contract. If you didnt sign a contract, you might as well not bother. The client can (and may) contact the Architecture Review Board and complain (if you didnt sign a contract). You will get fined by the Architecture Review Board and get your name in the back of their newsletter for violating the professional code (for not signing a contract)
"and we didn't give her invoices at the end of each month, but all at once for 3 months"
lesson 1: never let a client get too far ahead; but i suppose you know that now.
don't feel too bad though - i know someone who designed a house with a construction budget of $1 million and he actually let the client dictate the contract such that he does not get paid until the client closes on their construction loan. he's in the hole for 10 times what you're owed and can do nothing about it but sit back and pray they'll pull the loan after all.
we had a contract, but it is not very thorough. since then, we've obviously updated the contract and now get bigger retainers. also, we aren't licensed as architects, but that's good to know.
A lawyer of sorts......meets architect of sorts......always a bad combination.
i dont do anything with a 2-3 page contract listing materials/time/paint/etc......
gotta cover your ass.... i'm sure we all been burned before and that's that
either small claims and then add interests for late payment.... send a certified letter with invoices and pics and let her know that you are collecting an outstanding debt owed to you for work performed....
or just call vinnie and tiny and some pipe hitting' mofo's
Follow her husband around for a couple of weeks, just to be sure he is not a cheater. If you discover he is then, have a meet up and tell him you know he is cheating on his wife and she owes you $8,000.00
plus expenses, which would be all the time you have dedicated to trailing his lame ass. You should walk away with around twenty grand.
Always invoice monthly and make sure the first invoice is same ie less than $1K then see how long it takes to pay. The worse case you work the next month a bit and if they don't pay you don't work... simple. Three months is way too long to go before you spring an invoice on them..... how would you feel if someone dropped that on you. I'm not supporting her but you have to be more business like and if they can't be you'll get burned everytime.
I had the same experience way back and never been burned again, the key is not to get yourself into a place where the amount is significant enough to mean something. ie I won't sweat $1k but $4k relates to a lot of time and effort.
After that go with the bat.
here it'd have to be a louisville slugger.
All good advice above. I especially like snooker's idea of catching the husband - or her - potentially cheating. Kidding!
It is a good idea to tell the client, especially if you've fallen behind on invoicing, that you are sending them an invoice before the bid drawings go to the printer. If they don't pay, you don't release the drawings for bids. It's hard, I know - asking for money is the hardest part of our job - but I've also been burned and really we need to be ruthless about getting paid for the work we've actually put in.
When I got burned it was also a lawyer - but we had our own lawyer send a letter and ended up getting 75% of what we were owed, minus a small fee to the lawyer (who is also a friend - we barter).
my advice...DONT WORK FOR LAWYERS. They use the fear of the law to their advantage...
Useless trivia fact re: Louisville Slugger. The Louisville Slugger is made by the Hillerich & Bradsby Baseball Bat Company. My great-grandfather was Hillerich. Don't ask me what ever happened to the family fortune, though.
4k on a 100k job - seriously weighted.
Not much need to comment...however I suspect your client saw that you short changed yourself, and perhaps was being anything but 100% business-like
sorry
if all else fails, put a lien against their house/property for amount owed, so at least you'll get your money if they ever sell their house..
touching on what liberty bell said though, for future projects, in our contracts, it states that all fees for services performed are to be paid in full before any bid sets are released to contractors. when clients get bids back (always high of course) they become surprisingly extra-stingy about their money.
2 words:
gasoline.matches
a client can bond around the lien and get out of it if you dont persue the lien. This is where a lawyer's knowledge of the law can get them out of almost anything.
I have always wanted to buy the domain name of clients who have screwed me out of money and set up a website explaining that so and so will fuck you over. I have a knack for Googling anyone that I do business with in order to try to establish some sort of background (call it stalking if you will). Having a website that will tell any future business partners that you cant be trusted would be priceless, IMO
I had a similar situation. It took a while but I got paid
I had a contract. I got a deposit before starting.
When the client decided he wasn't going to need me anymore. He continued using my drawings to get permits and build the project. He had the contractor scribble some details on them to satisfy the permit office. I informed the contractor the client was in breach of my contract for unauthorized use. Copyright laws are a powerful upper hand. Stipulate in your contract that if the client fails to pay the drawings are no longer allowed to be used, copied, distributed or modified, for any purpose. Let the permit office know the client is in a breach of contract. Continue sending invoices with big red letters "2nd notice" "3rd notice " etc... I think most lawyers believe we are afraid of them and will go away. If you weren't authorized by the client to do the work, or performed carelessly, then it will be harder to collect. Don't threaten to go to court unless you are fully prepared to do so. Bottom line, it's a great learning experience whether you like it or not.
too bad about the family fortune, LiG. the hillerich's here still seem to be doing quite well, especially since h&b moved its manufacturing plant back into downtown louisville, which, together with their baseball museum, has become a tourist attraction. jack hillerich seems to be a cool guy.
mdler,
priceless yes, but also has the potential to make you liable for a libel suit.... slander is illegal as well..
Perhaps you could swing by her place some evening and pick up 4 G's worth of lawn ornaments, if you know what I mean...
This may also require the use of a ski mask and/or baseball bat.
Send bills not invoices. People pay bills on time and get nervous when they don't. Invoices get put in a "when I get to it" stack.
re: sticking a lien on them, see this thread. If your state allows designer liens, most of the time you can't file until they pull a building permit, plus you need to fulfill lots of paperwork exactly at the right moment- since your practice doesn't seem like it's very good at timely paperwork, you probably already missed the window of opportunity for notifying the client that you have the right to lien. Plus one of them is a lawyer- but what sort of lawyer, only be afraid if they are in real estate law.
I'll repeat, monthly bills are critical anything less is placing yourself in risk for exactly this situation. take this as an expensive lesson or take them to small claims court and hope you have a strong paper trail.
ok. so does anyone know a lawyer?
mdler that is a great idea!!!
try being owed 250k! answer...we did not release any drawings, or answer client calls until check was delivered. Once construction halted because RFI's and Submittals weren't answered and permit submission was being threatened (potentially costing the client millions in impact fees..) the 250k was just a drop in the bucket.
you have to love the client who makes $15million a year try to screw you out of $150...
We could start posting there names here.....or start a website to post non paying clients names.....and charge a small advertising fee....::::
deadbeats.com
do it...
so far over the 8 years i've been learning this business...doing models/design/build....... i've been burned about 35,000 or so....but i have wised up since my last burn...
contract+retainer+budget= i will pick up a sharpie and start to design
contract+retainer+.dwgs= i will start the model
it's a bitch when you want to do great work and get jacked for your time....
i had a famous dj try to get me for free design..... i went over to his place that he's renovating...... he has a few guys doing the work but wanted some creative things from me.... well, after past rumors i have heard about him..... he was like "come up with some design ideas and i'll look them over and see if we can work it out"....... in translation that means... free design to give to his other guys to build....... i didnt lift a finger and told him that i needed a budget and timeframe to get this done...and a retainer............. well, that never happened and i see him about 3 times a week or so.......
would be nice to be in the mob or something so i could call cousin vinny to collect my money plus interest...
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