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What do I do if customer refuses to pay for agreed upon changes?

I am a contractor. My customer does not want to pay for completed work on a change order she agreed to as an addition to the original contract. She says the changes cost a lot of money. She knew the total cost in advance and emailed me to ask how fast I could start on the work in the change order. How should I proceed?

1 reply

Apr 24, 2020

It's common for an owner to dispute change orders, even when they've clearly asked for those changes. That's why it's crucial to get everything in writing. That way, if the owner comes back and refuses to pay for changes, you'll have written approval from them. While a written and signed change order would be ideal, having email or text communications that show the owner knew the cost and requested/approved the work will be really useful.

How to force a customer to pay you what's owed

There are a number of different avenues that can be useful to force payment. Let's start with some less-adversarial options, then move to more official and formal claims.

Invoice reminders

Sending a simple, but formal, invoice reminder can be extremely useful. Invoice reminders act as a nudge in the right direction - they push the customer to pay what's owed by simply reminding them what they've agreed to and what they owe. So, before going into an all-out dispute, these simple reminders could get the job done.

Demand letters

Demand letters ratchet things up a notch. They'll usually include specific legal threats and put a deadline for making payment. If talking things out or sending reminders won't work, then turning up the heat with a payment demand letter might.

Notice of Intent to Lien

Mechanics liens are extremely powerful, which means the threat of a mechanics lien is also very strong. Sending a Notice of Intent to Lien lets the customer know you're serious about getting paid and willing to do what it takes to make sure it happens. Most owners will do what they can to make sure their property isn't liened - so a Notice of Intent can be really useful.

Filing a mechanics lien

Mechanics lien claims are generally viewed as the nuclear option, but they were specifically designed for situations where customers refuse to pay what's owed. So, if a customer is adamant in their refusal to pay, filing a mechanics lien can force them to take the situation seriously. Plus, under Nebraska's mechanics lien laws, change orders and extras are clearly lienable. For help filing a lien, these resources will be valuable: (1) Nebraska Mechanics Lien Guide and FAQs; and (2) How to File a Mechanics Lien in Nebraska – Step by Step Walkthrough.

Other recovery options

There are recovery tools outside of the lien process, too. Legal claims may be available - like breach of contract, unjust enrichment, or a claim under Nebraska's prompt payment laws. Plus, sending the debt to collections may also be an option down the line.

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