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The Basics of Back Charges in Consturction

Sometimes the worst thing happens: a subcontractor or even a construction company is unable or simply does not do a satisfactory job fulfilling the work they were contractually obligated to complete.

This can mean adding unforeseen costs to the expense of the product, and this is where back charges come in.

This article will explain what you need to know about back charges, how they work, and why you should be aware of them.

What is a Back Charge?

Back charges may need to be sent for a few reasons, including but not limited to:

    Cost of damages done to job site necessitating repair
    Cost of cleaning the job site to ensure worker safety and OSHA compliance
    Cost of the rented equipment (or cost of using said equipment) needed to repair damages
    Cost of materials needed to fix or replace improper or damaged materials/work

Sending Back Charges

In the best-case scenario, you can send a fee for the back charge to the party that did the improper work.

Before signing with a sub-contractor, ask about back charges and see if you can reach an agreement to include them. This can help you be confident that your subcontractor will do the job right the first time. However, not every subcontractor accounts for back charges, which can lead to issues.

If you do not have a subcontractor you can send payments to, you may have to send extra charges to the client. This can cause further issues, as oftentimes these notices are not well received. Here are some ways you can make the back charging processes happen smoothly.

Documentation and Communication

Having documentation that proves the necessity of the back charge can go a long way in these instances. This way the client understands the situation. On the other hand, documentation is necessary for subcontractors as well.

This way, they understand what work was unsatisfactory and they can take steps to fix it. Keeping detailed records of the job site can help a business and subcontractor agree on service quality or may serve as evidence if you must go to court.

Communication is key in this phase as well. Be sure to talk about any back charges directly and explicitly with the necessary parties. Allow ample time for the damages to be corrected and for the fee to be paid.

Get the Service You Deserve, Or Make Them Pay

To ensure that you have back charges, you need to be certain that the contracts you send out contain them. When you choose Nationwide Notice, you are gaining a team of experts who understand your company's needs and want to protect your right to get paid.

Get the most out of your notes, liens, bonds, and other filling services when you employ Nationwide Notice’s noticing management tool and experts. We are a lien and notice service company dedicated to helping contractors get the payment that they deserve. Our team of experts can help you resolve your collection problems and work through the lien process. We work with construction companies in any state for any payment they need for any type of project - all things construction payment. To learn more about what we do, visit our website for more information.

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