Non payers (in the electrical industry)

[skatingsparks]

Hi guys and girls.

I'm putting this in this section because I'm specifically wondering what other electricians do when they don't get paid.

I have a pretty good relationship with all my customers and only 3 times in 25 years have I not been paid (obviously they are now ex customers).

This particular one I'm struggling with now I have been working with 6 years and can honestly say I really have done good work for them, went the extra mile very all the time, their clients wanted high end finishes and thats what I gave them. I worked a 36 hour shift once to get something finished on time, travelled all over the place, gave them good prices as the work was consistant.

Now the guy who was teh back bone of the business passed away - yes he was s sloppy payer but you knew you were going to get the money eventually. The person who has taken over after his death (his trouble and strife) doens't ooperate teh same way.

I have my usual T&C's in my quotes and invoices but as far I can make out they ain't worth toffee.

'Material supplied by XYZ remain the property of XYZ until invoice settled in full'

What do you have in place. No one seems to care you won't give them the COC.

Very seriously considering going to the jobs and ripping it out - most are large shops so getting access isn't a problem (obviously without damaging there stuff - just going to take all the electrical stuff out that I can without disrupting of damaging there stuff. Breakers and earth leakage are expensive!

Its an ammount I'm not willing to just let go - out of principle - I REAAALLLLY worked hard for those guys.

Advice and opinions please

[adrianh]

I don't have the answers - only questions and thoughts.

Isn't it against the law to remove stuff?

What would you do if they called the police on you and accused you of trespassing, damage to property and theft? (As far as I know only a court could order the removal of goods)

'Material supplied by XYZ remain the property of XYZ until invoice settled in full'

I doubt that this gives you the right to remove stuff (ownership and location are not the same thing - The fact that I own the car that my daughter drives doesn't mean that I can "steal" it from her garage) "steaL" would be the words that she would use if I were to take it without her consent.

[skatingsparks]

So the job is in a large white goods sellers shop one of the biggest in South Africa - its not the shop owners not paying or the shop stand owner, its the shop fitter who built the stand for the stand owner.

In terms of tresspassing I spoke to the manager and the conversation looks like he doesn't consider it theft from the shop. The stand owner will be angry. I'm going to speak to them next.

I have no intention of dmaging the shop, the stand or tha appliances. I can easily remove breakers, DB's, sockets etc with out causing any damage to teh stand. Its not my intention to cause damage to the stand or the appliance on it. I'll handle them with the same care as I put them in. I'll leave it safe obviously but I'm not leaving R35000 (+/-) material which I haven't been paid for.

On the previous 2 attempts by debt collectors were pointless. You have no leg to stand on no matter what you put in your terms and conditions no matter if the quotes are signed. So what do you do? Thsi is my question.

I don't usually have problems, my work is A1 (I really do believe in my work - not a corner cut ever, proper tools, proper material, excellent finish - never had a call back (apart from a few failed LED drivers and lamps)

The discussion with the shop maanger went like this.

Me - "if I bring my cell phone to your shop, leave it here, then come back for 2 weeks later and take it - would you consider that theft?"
Him - "No"
Me - "why?"
Him - "because its your cell phone"
Me - "if i brought my tools here and worked on your shop, left them here whilst I worked and then took them from the shop at the end of the job - do you consider that theft?"
Him - "No"
Me - "If I walked out of here with one of your microwaves, is that theft"
Him - "yes I have a problem with that, you haven't paid for it so its theft"
Me - "So until its paid for, me taking something is considered theft. If its paid for I can walk out with it"
Him - "yes, with a 3 year warrenty, where's this going by the way"
Me - "So if I bought a load of materials into your shop a few months ago and I didn't get paid for them, who do they belong to?"
Him - "You I guess or (white goods sellers name who Iwon't put in, but they big)"
Me - "So I'm not stealing them am I if I take them back. Its kind of like I was renting them to you"
Him - "er.... I guess. But the stand belongs to ..........."
Me - "Well I'll just take a washine machine of the stand."
Him - "That belongs to us."
Me - "why?'
Him - "because we bought it from ......."
Me - "So if you bought it you don't like the idea I'm going to take it. But I haven't been paid for my stuff, so can I take it back - It hasn't been paid for. Same as leaving my phone here same as leaving tools here - they are mine and you ok with me taking them out"
Him - "can't argue with that, suggest you contact ........ I have no problem with you taking your materials as long as no damage is done to our shop but try and resolve it with ....... first then get back to me"
Me - "will do."
Him - "not speaking as a manager, I'd do the same"

[adrianh]

As an academic debate that is fine - I think though that when it comes to the law and proof of ownership then things are different.

If you go in there and start removing stuff I bet they will call the cops and have you arrested. I bet the cops will tell you to take them to court because the cops are not able to sort it out.

It is absolutely terrible that companies / individuals do this (not pay)

I've been there - I took a dangerous tack that paid off - I emailed their head office with the whole story and told them that it is fine - that I was happy to write the R20k that they owed me to marketing for them and telling the entire nation how poorly they treat their suppliers. How they refuse to pay their invoices and put their suppliers out of business. I told them that I admin 5 Facebook pages and that I would tell everybody about the way they operate, that I would set up a Facebook and Instagram page for them and that I would hand out flyers on the street corner near their shop. I said that I was happy to use my internet skills to mail bomb thousands of people for them too. I got email all of 15 minutes later from head office with a Proof of Payment. This is dangerous because if they ignore you and you go ahead they may just be able to get to you. In my case the threat was all it took.

[GCE]

Hi
Is a problem in the construction industry and when ownership of a company changes often the ethics change as well , especially if the death was suddenly and a mentoring process was not in place to show the next owner the advantages of paying on time.

With that said , you cannot take the material back out, as that will bring all sorts of charges against you.
It is possible that the shop owner has already paid the contractor in full .

The trick , or fine line we walk , is deciding, do we play nice and hope we get paid and get more work from them or do we get hard knowing that we will no longer be working for them.

Without knowing the amount involved or the potential future earnings.

My attorney always used to remind me " out of principle " can be expensive road and the only people that get rich are the attorneys.

Once you start the hard line walk there is generally no turning back.
I would first attempt to sit and find out what the problem is and get commitments with dates and amounts to be paid.
If he comes with the story that the client has not paid then offer to " help him" by sending a letter to the client on the basis that they are playing with your cash flow etc , a tear checking letter. Generally you will be told that he has been paid and he will not want you to send the letter.

Then threaten to send the letter to the end client requesting direct payment and copy in as many people as possible. The end client will not agree to pay but may step in and help, in you getting money .The withholding of the COC sometimes helps the end client getting involved and if he is on your side he will refuse a COC from any other contractor due to the general control clause and knowing that you did the work.
The threat sometimes works as he will not want to be embarrassed and may then commit to amounts and dates .

Sometimes a phone call at 2 in the morning a couple of times per week can also have the desired effect. They complain about waking them up and my answer is that I was battling to sleep worrying about cash flow. Needs to be a landline though, to easy for them to block calls to cellphones unless you buy a couple of sim cards at the local corner shop

Thereafter it is a visit to an attorney that understands commercial - The attorney account to do a letter or two will be at R20K in the blink of an eye .

The next step is to apply for default judgement , if you have paperwork , and the change in laws have made the process difficult . The account will jump to 150K with no guarantee. Thereafter it will climb slowly to 250K and probably a year or two down the line , still without the result you want.
If it gets to court you will be looking at around 50K a day depending on the complexities of the case.

When you start with an attorney decide what amount you are prepared to throw away before stopping.
An attorney worth his salt will advise you as to the expected outcome and the cost involved along with timelines from the onset.

[ACEsterhuizen]

2.8.3 Sub-regulation" 3


If at any time prior to the issuing of a certificate of compliance any fault or
defect is detected in any part of the electrical installation, the registered
person shall refuse to issue such certificate until that fault or defect has been
rectified: Provided that if such fault or defect in the opinion of the registered
person constitutes an immediate danger to persons in a case where electricity
is already supplied, he or she shall forthwith take steps to disconnect the
supply to the circuit in which the fault or defect was detected and notify the
chief inspector thereof.


Note: Self explanatory


And in SANS 10142 Page 318 there is a nice form to fill out and hand a copy to the non paying customer who's installation has developed "very dangerous circuits " all of a sudden.

Works every time, at least for me.

[Dave A]

Unfortunately removing components or disabling the electrical installation without obtaining a court order first opens you to a spoliation order being obtained against you. To add insult to injury, a spoliation order not only requires that you restore the undisturbed use of the property, but also requires you pay the applicant's legal costs in obtaining the order against you.

Personally, if the amount involved makes collection via legal action not financially viable, I go down the "adverse credit listing" route via Accountability. It works sometimes and what I do manage to collect this way certainly exceeds what I spend on Accountability by a fair multiple. So it's better than just walking away...

Absolutely useless if the debtor already has an adverse credit report against them, but it's cheaper to list than to do a credit record enquiry

[skatingsparks]

So, from what I'm reading, in a nutshell - there nothing that can be done other than kak them out on social media.

Basically the stand we wired is in a shop. The shop doesn't own the stand. An "appliance" company owns the stands and they paid a shop fitting company to build the stand.

I do the electrical work for the shop fitter. Guarentee you will have all seen the stands we have done no matter where you are in the country.

Considering contacting the "appliance" company. They know me and have know my work.

I might as well pay a builder a deposit to build me a whole house. Sell the house then not pay him, rinse and repeat because there ain't shit they can do (apart from call me nasty names on social media)

[skatingsparks]

So my supplier, not surprisingly, is probably going to hand me over as the materials from the unpaid job have been on my account for a really long time.

I have the money to clear it but it will completely screw my business up for a long time.

I'm not a big time contractor. It's just me and 2 guys (first thing to go will be their jobs for a while). Losing R75000 (+/-) will cripple business my size.

So basically I have to write that money off.

Next question - what do you put in place before work starts to prevent this.

You bigger guys surely don't go into these bigger jobs without something in place.

I have signed quotes and a take deposits.

I want something more solid in place before I go look for the enthusiasam to keep the business going.

[Dave A]

As you are already taking deposits, on that front I can only suggest you increase the size of the deposit where you feel you are overexposed.
"Overexposed" is where non-payment by the client poses a significant financial risk to the ongoing viability of your business.

Try not to be too hard on yourself. Based on your o.p. there was a 6 year history with this client and if that was without a problem, you have been hit with a change that could not have been foreseen. If there were warning signs, learn from them so that you don't repeat the error.

The other thing is make arrangements with the supplier to pay the debt off. Offer to pay more than you are buying each month and make sure payments are allocated to the oldest debt. And then stick to the deal.

The supplier will probably appreciate you simply sitting down with them and playing open cards. Obviously, getting your debtor to pay is your problem, and I wouldn't give up on that. But it is your problem. Suppliers will help you as long as they can see you are not digging the hole you are in any deeper, and you have a plan and the discipline to dig your way out.