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CaliforniaConstruction ContractRecovery OptionsSlow Payment

I am a subcontractor in California, I have a customer that hasn't paid, and is over the deadline for payment, the job was bid at a way lower rate ask this was the contractors 1st job in California. They stiffed us on paying, can we bill in full the going rate in California? There was a verbal agreement which was said once the job is completed, you will be paid, and covid-19 happened and they are hiding behind a msa we signed for a 30-45 day payment and of course they are beyond the 30-45 days....

1 reply

May 6, 2020
It's a bad idea to bill a customer over and above the agreed-upon price, even if that price was given at a discount. Ultimately, that's the figure that was agreed upon - and that's the figure that's owed. With that being said, that doesn't mean the contract price can't be recovered. When payments are coming slowly, there are a few different payment recovery tools that can help to speed things along.

Tools for speeding up construction payments in CA

For one, sending something as simple as an invoice reminder can prod a customer into paying what's owed. Or, stepping things up a notch or two with a payment demand letter or even a Notice of Intent to Lien could put some pressure on them to make payment. By sending a Notice of Intent to both the customer and the owner of the job, that can apply additional pressure from the owner - and they could push your customer to pay what's owed. Mechanics liens are considered a nuclear option, but they can get the job done and force payment. So, if your work has ceased, then pursuing a mechanics lien for unpaid sums could be a particularly strong option for making the customer and/or the owner pay what's owed. More on that here: (1) California Mechanics Lien Guide and FAQs; and (2) How to File A California Mechanics Lien – Step By Step Guide To Get You Paid. And, to be sure - CA lien claims can only be filed for the lesser of (1) the agreed upon price; or (2) the value of the work performed. So, if a lien is filed, it's limited to the contract price.
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