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Not all general contractors engage in this unacceptable behavior, and those who do don’t necessarily do it all of the time. But it DOES happen, and it IS a real problem. So how do you avoid losing project profits to unfair and spurious end-of-project backcharges or cost-“sharing”? It’s a combination of preparation, tenacity, and a willingness to push for what you are rightfully due. First, the bad news — if you want to get full payment in a scenario like this, you need to be prepared to wait for payment. Once you reach the end of a project and a general contractor plays this game, it can take months (or the length of a lawsuit) to get paid. But persist! Second, be vigilant about submitting claims for payment on all additional work you performed at the end of the project (or any time, really), and carving out those claims from all lien releases. This includes claims for impacts (unexpected effects on the efficiency of your project work) and delays (failure of the general
contractor to support your timely prosecution of project work). That way, you will have protected your rights to compensation for what comes next. For more information on this, ask for a copy of my book (details at the end of this article). Third, demand what you are due. If a backcharge comes in, refuse to sign it until the general contractor has provided clear reasoning (with documentary support) regarding why that backcharge is your responsibility. And if negotiations with the general contractor do not result in payment, be certain to secure your payment bond and mechanics’ lien rights. Successful payment claims require leverage over the general contractor, and the pressure brought by bond and lien claims is some of the best leverage out there. At the end of the day, commercial construction projects can be a rough-and-tumble world, and the prepared and determined subcontractor is the one, in my experience, who gets paid in the end.
If you want to learn more skills and tips about avoiding construction claim pitfalls, you can receive a free copy of my book “The Subcontractor’s Roadmap to Getting Paid for Extra Work” by emailing me at jwyatt@harrisonlawgroup.com.
-Jeremy Wyatt
jwyatt@harrisonlawgroup.com
www.HarrisonLawGroup.com
(410) 832-0000
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