Getting a Company to Pay for Construction Work: What You Can Do
Getting a company or client to pay for the work you’ve completed can be a frustrating challenge, and it exists across almost every industry. Unfortunately, it’s particularly prevalent in the construction industry. Delays or non-payment can greatly disrupt your business and impact your cash flow.
There are a few effective strategies you can employ to ensure that you receive timely and fair compensation for your construction services. By understanding your rights and the steps you can take, you can navigate payment disputes with confidence and get the money you’re owed.
A well-defined contract
A good contract is the foundation of getting paid properly for your construction work. Work with a professional to draw up this contact, and ensure that it clearly outlines the scope of work, payment terms, milestones within the project, and any penalties for non-payment or delays in payment.
A comprehensive and watertight contract provides a legal framework for both parties, and greatly reduces the likelihood of disputes.
Thoroughly documenting everything is a great way to support your case in the event of non-payment. Keep careful records of all project-related documents, like invoices, receipts, change orders, and correspondence.
Accurate documentation will be invaluable in proving the work you’ve completed and the payments you are owed.
File preliminary notices
In many jurisdictions, filing a preliminary notice is a legal requirement to protect your right to payment. These notices inform property owners, contractors, and other stakeholders that you’re working on a project and will be expecting payment.
Filing preliminary notices can help you secure your claim and receive your payment.
Communicate and negotiate
If a payment dispute happens to arise, effective communication is essential. Reach out to the responsible parties to discuss the issue and seek an amicable resolution.
In many cases, disputes can be resolved through negotiation between parties, helping you to reach a fair compromise.
Consider lien rights
Construction liens, also referred to as mechanics’ liens, can be a powerful tool in securing payment for your work.
If payment disputes persist, you can file a construction lien on the property in question. Liens provide you with a legal claim on the property, and they can prompt property owners and contractors to address the payment issue properly.
Mediation and arbitration
If negotiations are unsuccessful, you might consider alternative dispute resolution methods like mediation and arbitration. These legal processes are less formal, and less costly, than litigation.
Mediation involves a neutral third party facilitating a resolution, while arbitration involves a neutral arbitrator making a binding decision. These methods are often quicker, and less adversarial, than going to court.
Legal action and lawsuits
Although most people want to avoid taking legal action through a lawsuit, at some point in the process, it becomes necessary. Consult with an attorney experienced in construction law to help you explore this option. Lawsuits can sometimes be time-consuming, but with an experienced attorney, you’ll be able to navigate the process with relative ease.
Securing payment for the work you’ve completed is necessary for the financial success and stability of your business.
Following these strategies can help you navigate payment disputes effectively, and increase your chances of receiving fair and timely compensation– making sure that your hard work is duly rewarded.