Steve Payne
I just had my most difficult customer… He has threatened to sue over the lien I placed on his home for $7,100.
Canadian ContractorJim is owed $7,100, and has placed a lien on his client's home. He says Small Claims Court has a maximum claim of $5,000. Any advice from readers on what his next step should be?
Canadian Contractor reader Jim Brown (Roofrite) posted this yesterday. Can anyone give Jim some advice on collecting from his deadbeat client?
“I just had my most difficult customer. After completing work, going on three months, customer will not accept calls, e-mails, etc. However, he has threatened to sue over the lien I placed on his home for $7,100 for work performed.
Small claims court only allows for $5,000. To litigate will costs thousands more. As contractors we have very little support or protection against unscrupulous homeowners.
However you never hear about this – only about bad contractors! Any suggestions on how to proceed, short of legal action? Can I report them to any credit agencies?”
Edited version of Jim Brown’s post on Jan. 2.
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It is unfortunate you are not in British Columbia. Some time ago they raised small claims up to $25,000 and are looking at putting that up to $50K. This allows for more self representation and works very well (I have been through a proceeding myself with positive results). Anyway – you don’t have that luxury. I strongly suggest that you go to small claims for the maximum $5K and be ready to kiss the balance goodbye. If you have a legitimate, well documented case you shouldn’t have any problems. You can also suggest to the client that they take you to the Better Business Bureau where you can start the process and, hopefully, get into arbitration. This sucks as the client is the only one that can start the process.
Good luck!
In Ontario the small claims court limit is 25k. We are also in the roofing business and are currently taking 2 clients to small claims court. Unfortunately we let the 45 day lien rule lapse as we were promised the money. It is very time consuming to file a small claims action but worth it in the end. One of our clients will have a warrant for his arrest soon as he did not attend his examination hearing. We are fine if he has to spend 5 days in jail for contempt of court.
Well Jim it depends where you are. here in Ontario the small claims has been raised to 20K.
However you keep the lean on the property they can not close on the house incase they sell it . However this is good for 90 days only. The leain will expire but this also take a laywer with fees to deregister the lean.
I have one comming up in Feb. 5-2014. This would be a classic case for an 5th estate eposode. It is amasing howmuch an homeowner is willing to screw a contractor.
Hope fully I might haqve a follow-up on this one after the Fab. date.
I have been there done that…some of the above comments have noted options for you.
This type of client is a bully……the only way I know how to deal with them is to treat them the same way. So stand firm and push back. Once they realize you are not going to roll over, most will settle.
Something else to keep in mind is to send it off to collections….you are going to take a hit with max small claims court anyway……..if you send it off, you get the satisfaction of messing up their credit rating also.
I would suggest you contact Small Claims and ask if you can divide the total amount into separate cases. i.e. So much for taking off original roofing; So much for new shingles; So much for installation. Hopefully you will find there is provision for this sort of thing.
I feel for you. I’ve had a few like that over the years as well. I find surprising how some of these parasites are capable of walking upright.
It’s doubtful he will sue, it’s very expensive for him, too, and then the court will look at the whole case and he would probably have to pay anyway. Have you perfected the lien in the courts? If not let it remain. If and when he sells the house or tries to take a mortgage on it, he will have to settle the account before proceeding. Register the account with the credit bureau, that usually gets a response. That typically costs 35% of the invoice. You can get 21 day credit bureau letters. The bureau will send a letter demanding payment but you have an option of ceasing action at 21 days, so no additional cost to you, but the customer will think that you have attached his credit rating. The other option is to leave the credit bureau action intact which affects his credit rating long term, but will cost you the 35% charge if and when he does pay. By the way, you can place and retract a lien on your own as an officer of the company. Fees are about 80-100$ for the Land Registry Office, you just need a lawyer or paralegal sign off on the paperwork. Much cheaper.
Excellent and informed advice Dave ! **thumbsup **
I have suffered many times a similar story. As an independent Electrical contractor and small business owner you are viewed as the man to rip off by many people. Yes we can write it off at tax time but it hurts the bottom line and eats into our trust of others. In late Oct I did an emergency hook-up for a customer and submitted a bill for $225.00 ($175 for permit) and am still waiting. I felt sorry with no power and no heat so I took a chance. Never again.
they are correct small claims is 25k now limit. and the collection route you only pay if they collect is also worth a try.
Wish clients realize that we are professionals that strive to meet their needs and complete our work for them.
I guess, some hope we will just forget and move on with the loss but its certainly not right.
good luck
I’m so sorry to hear this situation. It seems to be happening alot more often lately…..which is quite unfortunate.
I myself have been debating about taking court action against a client as it has been almost 2 months and I have not been able to get a hold of this client….nor have I gotten any responses to phone calls, emails, texts…etc.
She is a real estate agent (25+ years)….seemed very professional and such…..and she only owes us a touch under $2000. I just can’t understand it.
I do hear court can be expensive…and time consuming…..so I’m trying to figure out if it is worth going through this court process….or if there is another alternative that I should explore.
Thanks everyone for sharing their stories…..and I’m sorry that we are all having to deal with this sort of thing.
Good Luck!
God Bless!
I fight long and hard every time I run into one of these types. Liens, small claims, collection agency, you name it. As a commercial painting contractor I am often the last on site and consequently the last to be paid. Even with my serious approach to collections I’ve still been taken down for over 100K in the last 35 years. My advice is to watch your lien date and make sure you get that lien on. It is your right. If they want to fight it they can pay the money into court and have at it. Without the lien to start you are unsecured and if there is any money in the pot those that are secured will have it all first.
I feel for you. I know this comment is very late. I hope you have the situation rectified. I have been ripped off by customers before. It’s always frustrating. The Way I look at it if you don’t have the time to spend to get whats owed to you bite the bullet and hand it over to Collections. To won’t get much back but at least you are fighting back. If the customer is being a complete bully about it just bite the bullet and go to the site and take your roof back with the boys. Make sure it’s going to rain the next day. I bet he’ll magically appear with the money!
Our contractor seems to make his living sueing owners,,, he treated us horribly did not build as per contract or plan,, kept giving us change orders and not build unless we paid, this was a fixed price contract and kept doing work not approved by us and charging us,, then put a false $102,000 lien on our house when we were paid to date and paid them as per contract,, now $20,000 later we are just waiting for a quantity survey the rough copy states all the mistakes and how we should be credited “no lien” this company has an amazing false website they did not honour there website or our contract. all we have from July 07th 2017 to now Feb 25th 2019 is a barley framed house, on a foundation does have a roof exterior doors and basement floor rough in hvac and rough in plumbing. thats it, we had paid them almost $90,000 for work complete so how do they get off putting a $102,000 lien on our house, This company has over 30 registered court cases,, I talked to one girl briefly as she stated she lost $25,000 to them last September but she was just happy to get rid of them and hired someone else. They have ruined our life, our house is now full of mold as its been sittiing all winter,, framing boards are moldy and trusses, they abandoned the build 5 months ago and its taking this long for us to save money to prove the contract,,, this is not fair very little help for the consumer,,, we had no invoice no warning at all about this lien, and no clue what $102,000 lien is for,,, how fair is that,, they do not talk to you,, our lawyer has 4 binders of horrible texts emails and bulling from our builder,, they are big and rich so they dont care,, I believe this is some kind of legal theft,, anyone thinking of hiring a contractor check the justice system and how many times they have registered in the courts against people,,, I really wish we had, wish the law would change, there are bad contractors that use the lien system to make money,, I believe we fell into that trap,