Everything You Need to Know - How to Get Paid In Construction
Most people would assume that construction projects are easy to get compensation for, considering their high amounts. However, construction companies get stiffed just as easily as companies that sell small-ticket items.
Any time you do business and offer an important service, rest assured there’s a conman right around the corner. Use these important tips to ensure you always get paid in the construction business.
Top Tips for How to Get Paid in Construction
These tips are the most important regarding how to get paid in construction.
1. Make Sure You’re Licensed
Certain laws protect construction companies from individuals who don’t pay. However, you have to be licensed to be protected by these laws.
The following statutes are in place to ensure owners get paid in the construction business:
* Contract law. When you draw up a contract, any signer of said contract must follow the payment stipulations within the pages of the contract.
* Prompt payment law. Anyone who receives goods or services and is billed will be expected to pay within a reasonable amount of time.
* Mechanics lien law. A mechanics lien law is an involuntary security interest in real property. This allows the unpaid contractor to hold an interest in the property, preventing a sale until all debts are settled.
2. Prequalify Your Customers
Customers research construction companies before they hire them. It’s only fair that you do the same when it comes to your customers.
Ask around, and don’t be afraid to do a little word of mouth research about a potential customer. Find out if they’re known to pay their bills on time and how long they have been around.
If they are essentially a ghost in the area or known to do bad business, it’s best to pass on them. Move on to the next paying customer.
3. Get Contracts in Writing
This goes along with being licensed and being eligible for protection under construction laws. When you get your contracts in writing, everything will hold up in a court of law.
Business done on a handshake may not be the optimal thing to do. Any professional customer will understand this dynamic when it comes to having work completed.
If the unthinkable happens and you get stiffed, a handshake deal may not stand up in civil court. The best practice is to have your customers sign on the dotted line and ensure the language is correct in your contracts.
4. Send Preliminary Notices
A preliminary notice is the first step in the lien notice process. Likely, your lien and demand for payment won’t stand up in court if you don’t follow the required steps the correct way. Always be sure to send a preliminary notice before filing a notice of lien.
You should never have to chase your money as a construction owner. However, things can always go south in any business. You give yourself a higher chance of receiving compensation for your hard work by paying attention to your customers and filing the proper paperwork. Nationwide Notice is a lien and notice service company dedicated to help contractors the payment they deserve. We have a team of experts that can help you through the lien process and resolve your collection problems, and much more. We assist construction companies in any state for any payment they need to secure for work they have done on any project, and all things construction payment. To learn more about what Nationwide Notice does, check out our services page or a general overview of what we do here.