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Thread: Sub contracting to companies

  1. #1
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    Sub contracting to companies

    Last year I had a bad run with 2 companies. It would be interesting to know how many sub contractors are robbed of their money by main contractors and their customers.

    People say you should get your T crossed and i dotted in a contract document. Then get a lawyer. Yeah right, if you are a sub contractor or even a small contractor you will know this is a load horse shyt. I have been doing this for 25 years now and I can tell you from experience, very little money is collected in this manner. The cost to take someone to court over R50 000 is just not worth the time and money wasted. I believe there should be more mafia style debt collecting, it works.

    One was a Cape town company which supplies and installs stainless steel tanks for the food industry. They did a job for a well know cake supplier in Durban north. Man did i battled to get my money out of these people. The two of them going at each other and over who is responsible for paying me. 6 months later i finally got paid, it turns out the cake supplier was suppose to pay some and the tank supplier was suppose to pay part of it. I just wish i had done my homework properly and not rushed in to assist, because the tank supplier was 6 months behind and being sued by the cake supplier. What a mess. I finally got my money at the end of last year. The cake company is still suing the tank company for losses.

    The second one was also a contractor who was running way behind on a holiday home for a well know BMW franchise owner in JHB. The contractor was running way behind schedule, he claims it was the owner was changing things all the time. Cut a long story short, I hear the BMW franchise owner was in a bit of a squeeze with finances so it seems he was taking advantage of the contractor taking so long used that as an excuse to get out of paying the outstanding balance of around R100 000. At the same time taken a small plumbing company to the cleaners and myself the electrical contractor. What gets me is all the bullshyt. It becomes hard to figue out who is the bigger bullshyter. The BMW franchise owner the main contractor.

    Let this thread be a lesson for all small contractors and sub contractor, make sure you ask for a huge deposit and collect when the progress payment is due. If the contractor or customer doesnt pay walk off site. You will be better off in the long run.

    Us little guys need to help each to prevent these payment dodgers from just going to the next small contractor, then to the next. It seems twitter would be an effective fast platform to name and shame these bullies who steal our hard money.

    I am so tired of being ripped off.

  2. #2
    Silver Member bones's Avatar
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    i do printing and stuff i am not
    as big as you guys but i do
    earn enough to call it a job

    my contract is simple the
    hardware remains my legal
    property until it is fully paid

    2ndly i demand a 20% deposit
    for small job and 50% deposit
    for a big job

    if the customer doesnt like it
    my door is very user friendly

    before i demanded deposits i
    nearly lost my business but
    now i am happy the wife is
    happy

    the kids are happy

    just demand deposits if they
    are unwilling to pay deposits
    then they dont have the
    money to pay you when you
    are done

  3. #3
    Diamond Member AndyD's Avatar
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    Great to see you're still in the land of the living Ian, long time no see.

    I've been burned in the past so nowadays I have a very specific payment schedule on most jobs which is designed to keep me from being out of pocket at any given stage of the job. I won't take on work from people who won't accept the terms, it's as simple as that and I've walked away from some nice looking contracts because they refuse the terms and I refuse to negotiate them. Usually it's the final payment that's not so easy to extract but it's in my terms that documentation, CAD drawings, certifications, user manuals etc won't be supplied until that final payment is made so we very rarely have an issue.

    Guess I'm lucky in some respects as well, I don't advertise and I turn away more work than I actually take on so I can pick and choose my customers. I've backed away from several jobs in the past for no other reason than I've had a bad feeling about the customer after doing some due diligence on them.
    _______________________________________________
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  4. Thank given for this post:

    Dave A (19-Jan-16), ians (19-Jan-16)

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    Diamond Member Justloadit's Avatar
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    Ja well, these customers who are usually very well off is not due to their pretty faces.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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    Full Member Gaynor's Avatar
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    This is a difficult one. My requirement is 50% payment upfront and the balance on completion, and I've recently made a mistake by lapsing it with a regular guy that I contract to - who has battled to get the payment out of his own client and here I am still waiting for my payment. It's very stressful and I just can't let it lapse in future. I like that - that the work is your legal property until all payments are made. I'm going to include that in future quotes, bones.
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    Diamond Member Justloadit's Avatar
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    Still requires a legal process to take back the goods and services.
    The moment you drill a hole and place a screw in the wall, or knock a nail in the wall, it is a fixture and you are no longer entitled to remove it, even if you have not been paid. You have to go the legal route to remove it.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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    Full Member Electrode's Avatar
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    Quote Originally Posted by Justloadit View Post
    Still requires a legal process to take back the goods and services.
    The moment you drill a hole and place a screw in the wall, or knock a nail in the wall, it is a fixture and you are no longer entitled to remove it, even if you have not been paid. You have to go the legal route to remove it.
    Also remember if you claim ownership of the hardware even if it is installed you can also claim for damages. Yes you will have to go to court to claim ownership. When and if the court grants you permission to remove the hardware you can also sue for damages on the hardware. This can easily escalate cost dramatically. I am also told that blacklisting a bad client is also a good way to retrieve monies owed. I do not have any experience with that.

    My own implementation would be to divide the work in sections. 1st section is to procure goods and I would demand a 50% deposit that must be paid out front. 2nd section will consist of installation that I would demand a 20% deposit to be paid out front before work begins. Then I have recovered 70% of monies owed without actually risking anything. To my mind if the client is unwilling to pay the deposits then he will not pay the final amount. If he does not pay the 20% deposit for work to get started then I walk away without having to remove goods or parts from there premises.
    DISCLAIMER - The above does not constitute to legal advice or formal advice in any manner or form

  9. #8
    Diamond Member AndyD's Avatar
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    If it's a simple installation in a large home or small business we require the materials amount as a deposit before work commences and the labour amount is split into stage payments. If the client so wishes all the materials will be delivered to site immediately and remain there.
    _______________________________________________
    I am special and so is Vanash.
    _______________________________________________

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    Can i share my story and include names of all involved including their company names. Not a name and shame. I would like to tell my side of the story and give them the opportunity to tell their side of the story. I can send them both a link.

    A person who overheard our meeting we had on christmas eve, came over to the table and pointed at the 2 of them and told them to pay me my money, as i had done nothing.

    If i said i would be on site at 8 am on monday morning, i was there at 7.50 am. Neither one of them could fault my workmanship. The project was completed in a reasonable time frame. We were held up because materials were not supplied on time ( the materials they supplied)
    The joke is the money owing to the sub contractors is less than the owner spent on furniture for his new holiday house. Yet they both fighting with each because it seems they have spent all the money on things other than paying us for our work. This is such a common problem.

    I have a customer who used the money he was suppose to pay us to buy a motor bike. Then laughed at us and told us to take him to court. I am not going tell how we got our money, but i will tell you, I was eventually paid in full.

  11. Thanks given for this post:

    bones (22-Jan-16)

  12. #10
    Diamond Member AndyD's Avatar
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    Quote Originally Posted by ians View Post
    Can i share my story and include names of all involved including their company names........
    There's some advice here on naming and shaming so it's up to you.
    _______________________________________________
    I am special and so is Vanash.
    _______________________________________________

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