It’s Wise Up Wednesday: Don’t Use A Digger To Collect Your Money!
£600, £60,000 or £600,000 The Frustration Is Just The Same!
Whilst it is only going to get the poor guy into more trouble, you have to have some sympathy (if not indeed empathy), with the machine operator who was obviously so distraught about not getting paid, that he smashed up the reception at the newly completed Liverpool Edge Lane Travel Lodge with an excavator!
On some versions of the video on Youtube you can hear the figure of £600 being shouted out as the amount that hasn’t been paid. And whilst that’s small beer compared to what you might not be being paid, everything is relative, and it’s obviously a lot of money to this guy, and for him, not getting paid is going to have consequences that we can only imagine
Not Getting Paid Always Has Consequences
Life would be much simpler if you did the work, sent in your application and received your payment in full and on time!
But in reality, as a Specialist Subcontractor you will often find that your works are not being valued properly by the QS and that you are not getting paid properly . And for you that’s going to have consequences.
As a Specialist Contractor getting paid on time could mean the difference between survival and insolvency!
So Why Do Some Specialist Contractors Get Paid and Some Don’t?
Here are a few thoughts based on 20 years as a Specialist Contractor followed by 28 years of resolving £millions of pounds of payment problems for you guys;
- Make sure you agree terms you understand
- Know the dates your payments are due and make the Contractor aware that you know.
- Make sure that all applications are in on time and comply with the contract
- Wherever you can, meet with the Contractor to agree your valuation
- Contact the Contractor before the payment is due to make certain they know when you are expecting payment
- Make sure the Contractor knows that; a) if payment is late, you will suspend your works in accordance with your contract, or b) if he pays less than he should you will take prompt action
Can You Suspend Performance?
Suspending performance of the works is a powerful incentive to make the Contractor put you at the top of the list when it comes to making payment.
But you MUST follow the contract!
Used properly, suspension is your best solution to prevent late payment.
You need to be careful and we would always recommend that you take our specific professional advice before suspending performance.
Remember our team includes Specialist Quantity Surveyors, Construction Contracts Consultants, and Solicitors, so we have the capability to resolve your problem fast. Click here now for details
Under-valuation Set Off and Contra Charges
If the Contractor is undervaluing your account, or making a set off, or is deducting contra-charges, there are steps you can take to resolve the situation.
First and foremost, you need to take action and fast, because the situation is not going to get better of its own accord.
If they are paying you less than you should, it’s more often than not about the variations, and you have to take action to prove what you say is due and put pressure on the Contractor to get it agreed. Here’s some information on that.
And if they are deducting monies, there is a significant difference between them saying it has cost £”x” for whatever reason, and them being able to prove that;
- a) it is your responsibility and
- b) they have actually incurred those costs
In both cases their claims, are exactly that “claims”, and the burden of proof falls on them.In other words; they have to prove that these matters are your responsibility and that any costs they say they have incurred have actually been incurred, and that they are reasonable costs reasonably incurred.
Think of it this way. How much trouble do they put you to when you claim for variations?
Pay When Paid
Since the Construction Act came into force such clauses are made “ineffective” unless non-payment is due to the insolvency of the Employer.
Either make sure you don’t accept such clauses, or you need to know about the financial stability of the Employer!
If payment is made late, interest becomes due on the outstanding money in accordance with Late Payment of Commercial Debts (Interest) Act 1998 which applies to all contracts as from 1st November 2002.
The rate of interest payable is 8% above bank minimum lending rate unless the contract itself provides a substantial remedy for late payment.
Want To Know More?
So, there we have it. Some reasons why some Specialist Contractors get paid, and some don’t. But, with the right assistance and application of the right principles at the appropriate time, you can make sure you do!
I have been assisting Specialist Contractors just like you, to resolve payment problems for the last 28 years. And, Streetwise has been providing services to our Buddies (members) for the last 10 years.
We are pretty confident that we can help you, so please feel free to contact our friendly team on 01773 712116. Initial advice is free.
Thanks and best regards
P.S. Please remember that we are here to provide solutions exclusively for Specialist Contractors. If you want access to professional solutions that work, then please give us a call on 01773 712116, or email firstname.lastname@example.org today.