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Can we add late service fees on a public job?

TexasPayment Disputes

I am a 2nd tier sub contractor on a Public High School project in Texas. The sub contractor has not paid us according to our agreement. We have added late charges per our agreement. We filed our public monthly notices. The general contractor has issued a joint check with a partial lien release. They did not include the service fees stating that was not their problem. Can I refuse to sign and demand the service fees be included in the joint check?

2 replies

Sep 20, 2021

You really need to retain a construction attorney to evaluate your legal position and to provide advice. The general contractor is certainly correct that you cannot claim late charges against the project or the payment bond. The late charges are between you and your customer.

You should read the partial lien release carefully to make sure that it does not release your late charges claim against your customer. By the way, even if the release did, you would be better served by accepting your money, and clearing the receivable. Late charges can be problematic, and sometimes can be viewed as a usurious charge. If someone asserts a claim for usury against you, and you have charged more than twice the legal rate, you could be liable for usury, and could have to forfeit the late charge, and perhaps the principal amount of your claim.

Incidentally, you cannot legally add a late charge (beyond legal interest at the rate of 5% which begins to accrue 30 days after the due date) if the customer had not agreed in writing to the late charge. 

Good luck.

1 person found this helpful
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Sep 20, 2021
This helps! Thank you.
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