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What are my options to collect payment from a rude and inconsiderate customer?

Customer is abusive and offensive. I dont want the demeaning and inhuman things she says to me. I can't take it anymore! She has not paid the structured payments we both agreed to in contract . i want to lein her property but if it has to go to court, the amount left on contract is enough for me to finish because i am a hands on contractor. but if she hires someone else, it will cost her much more. Can i be made to pay these costs because i wont work there anymore? What should i do?

1 reply

Mar 6, 2020

If an owner has refused to pay what's owed on the contract, California contractors will have a number of payment recovery tools at their disposal - including, potentially, a mechanics lien. Before looking at some of those options, though, a very similar question was recently posted on the Expert Center - and I think the answer to that question should be really helpful here: Want to Quit a Bad Customer.

Payment recovery tools when the owner refuses to pay

If an owner is refusing to pay what's owed, there are a number of tools that might help to force payment. For one, sending a payment demand letter will show the owner you're serious and that you'll do whatever it takes to make sure you're paid. A good demand letter will generally include specific legal threats and set a deadline for making payment. Another recovery tool might be to send a Notice of Intent to Lien. A Notice of Intent to Lien is a warning shot. It lets the owner know that if they don't make payment soon, then a lien will be filed against their property. And, considering the potential fallout from a lien claim, that threat is one that owners can't afford to take lightly. Finally, pursuing a mechanics lien claim is an extremely powerful payment recovery tool. So, while it should be the nuclear option, filing a lien claim will often do the trick and force the owner's hand. Of course, keep in mind that a direct contractor in California won't be able to pursue a lien claim until their work is complete or until they've otherwise ceased work on the job. For more on filing a CA mechanics lien: (1) California Mechanics Lien Guide and FAQs; and (2) How to File A California Mechanics Lien – Step By Step Guide To Get You Paid.

Will walking off the job result in a breach of contract?

This is a good question, and it's one we get often here at Levelset. In fact, we wrote an article about it: Construction Questions – Should You Walk Off the Job If Not Paid? Ultimately, it's possible that walking off the job could result in a breach of contract. So, if you intend to terminate the contract, then it'd be smart to make sure that's done in line with the contract. If the contract is silent about how the contract must be terminated, then it's a good idea to provide notice of the termination in writing, to cite to specific reasons why the contract is being terminated, to point out specific contract terms that have been breached, etc. Backing up the decision to terminate the agreement is extremely important when it's unclear whether the contractor has an explicit right to terminate. As a less-aggressive measure, keep in mind that California direct contractors can send a Stop Work Notice, under certain circumstances, when they haven't been paid for their work. So, posting a Notice of Intent that a Stop Work Notice will soon be sent could help. That document informs the owner that, if payment isn't made, the contractor has the statutory right to suspend their work. More on that here: California Stop Work Notice.

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