There’s not much point in building things if a project owner(s) cannot meet his obligations! If you’re working for government or public entities, this usually isn’t a worry. Private owners and developers – especially if the economy softens over time – can present a different set of circumstances. How does a contractor protect his interests?
This week in Digging Deeper, John Woodcock shares strategies you can use to assure prompt payment. The most important tip: Don’t be afraid to raise this issue! DOWNLOAD FBI’S new WHITE PAPER here
What are your best practices for assuring contractual payments? Please share with us in the comments below.
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Rex Kirby says:
I cases where the loan is not closed and the Owner wants us to proceed with work, we have asked for 2 to 3 months of our projected billings to be put in escrow with an attorney, with clear language around the release of these funds solely to us for construction. The amount would depend on the time needed to get through the notice provisions in the contract to enable us to stop work.
John Woodcock says:
Rex – You’ve just described another way to “skin the cat” as I referenced in the blog. You’re approach protects your exposure and gives you time to ensure that the owner’s access to the balance of funding for your contract will be in place. Thanks for sharing that idea!