problems face by the contractor in getting payment?

Question

in construction industry, the largest problem they have to face is payment..so what is the problems? why should have that problems?

Answer 1

You got to C.Y.A....Cover Your A_s....no one else will. You should always get a binding contract and ask for 1/3 down to help cover material at the beginning (this helps weed out those who can afford the work being done) 2nd/3rd at half way point of work being done (this will help carry pay roll) and final payment/3rd upon completion of job this will be taxes and profit.
I think that these persons are talented in their trade they are just not CPA or CFO's however if they write in draws into a contract with a starting and finishing date this will help them to get their money or stop the work and cut losses. Do the above then they won't be stuck too often, If they are they can take it to court.
I also suggest that they do credit checks on bigger jobs or ask around to make sure that the general contractor pays out or if the home owners have the money. If the person hiring the work is up and up... then they won’t mind for you to check…would you mind if they check you out? You might even give them info up front and let them know you’ll expect the same. It not personal its just business.

Answer 2

I think all industries face the same problem. It seems to me that you should get a certain amount of money up front, more money at a predetermined and agreed to points in the construction. If you are collecting all along, then the most you will ever be out is the final payment and if the final payment is small, you won't be hit hard. Good luck.

Answer 3

Pay a million/3 up front. Pay a million/3 partway by using the form. Pay the final a million/3 whilst the activity is finished. this could be defined on your settlement. additionally, make confident your contractor will pay the employees (subcontractors: plumber, electrician, kitchen guy, floor men and so on) by way of fact in the event that they do no longer seem to be paid, then they are able to place a lien on your place.

Answer 4

I think your first 2 answers are both good advise.
...the only thing I might add is to put a lien on their house at the courthouse and report them to the credit beauro...at least you will hurt their credit, and guess what, when they finally sale you can claim the amount +interest.
....I know it does not take care of your immediate bills, but it helps other contractors from being victims of these dead beats.