Upping your Odds on Getting Paid

Restoration season is upon us and many of us are already working the winter storm that hit after the Windstorm conference. As you gear up, let’s be sure you GET PAID for your work. Nothing is more financial draining on a company than to go unpaid on a project. Not only are the profits loss, but the direct costs have been flushed down the toilet.

Our goal at WCZ is to help you be in the best position to receive payment, regardless of what goes down. Securing your payments is the name of the game. It starts with your work Authorization, the contract. The goal is to keep the Authorization language to minimum so as not to scare off prospective clients, but beefy enough to secure your various rights. Here’s what it needs to address:

1. Clearly assign the insurance benefits for the work to your firm.

2. Comply with the State’s lien law notice; to the extent such notice is required.

3. Clearly state when payment is due, and provide for a monthly interest amount for late payments.

4. Provide for the recovery of attorneys’ fees for your collection efforts.

5. If you went arbitration as opposed to state court action (this will be the subject of my next blog), state such and comply with the State’s notice requirement, if any.

Okay, you have the job and your Authorization is signed, the next step is critical: Be sure a correct Notice of Commence is recorded. The Notice of Commence (NOC) protects you as much as the owner. Why? The NOC must be signed by the owner, have the Owner’s contact information and contain a legal description of the property. BINGO. How many of us have signed Authorizations by someone other than the actual property owner? We all do. Now is the time to correct that error, or send that Notice to Owner NOW! Most states have a short window of time to send the Notice to Owner; without which, you have NO lien rights. Now is also the time to confirm that the information on the NTO is correct. Most municipalities have their public records posted on the web. Take the time to double check the key information on the NTO. Does the stated Owner actually own the property and is the legal correct.  Remember, your lien rights are inextricably intertwined with the NOC.

The next step is to secure your position to get your name on the insurance check. This requires some tack and delicacy. Obviously, we don’t want to bite the hand that feeds us. But then, we don’t want that hand to forget about us at payment time, either. Must States honor and enforce assignment of insurance proceeds. A tactful letter to the carrier, cannot only secure your name on the check, but offer you a marketing opportunity with the carrier. Take advantage.

Now it’s time to get to work and do the stuff we love. I would make once last suggestion at this stage. Develop some sort of project size that you involve your counsel for initial review. The cut off size can be based on either estimated dollar amount or percentage of your total work product. As a rule of thumb, if the project represents 5% of your gross work for the year, involve your attorney NOW. $500-$1000 dollars could mean the difference of getting paid!