Have you pulled out your contracts with the various companies you work for and read them yet? I’m pretty sure you will find a clause in each contract that states something to the effect that if you place a lien on a property or allow a lien to be placed on a property, then by signing the contract you are stating that you recognize that you are liable for a $50,000 per day penalty which the company can charge against you.
I’m not an attorney and I can’t tell you the lawfulness of the clause, but if it’s in the contract then I suppose it can enforced. This is another good reason you might want to start reading your contracts before you sign them. Better yet, have your attorney read them and tell you what they say – in English. You might have missed an article I did several years back where I mentioned that I faxed a contract to our attorneys that had been sent to us by a national firm asking us to do work for them. One of the attorneys called later in the day and said “I really thought slavery had been abolished”. Now I’m not the brightest bulb on the porch but I took that to mean the contract was bad for me. I did not sign it.
I decided to write this article after talking with a regional contractor last week that got a call from a national contractor telling her that they were putting the $50,000 fine in place because the regional contractor had a sub-contractor that had placed a lien on a property. There was some see-sawing and the situation was finally resolved with some effort and some money. The regional contractor said she was placing the same clause in her contracts to put her sub-contractors on notice. Then she became a little perturbed with me I think when I said that rather than fight the bad guys she was just going to add it to her contracts and be a bad guy too. I apologized for the irritation and started right in telling her that I had spent most of the week trying to find a way for contractors to fight this type of bullying.
The root of the problem here is greed. In some business classes there is a nice phrase “opportunity lost” that works along with the greed factor. But the bottom line is that there are plenty of scum out there that will sign anything and do anything to make damn sure you don’t get the work. They want the work and will have it at any cost. The funny thing is that they don’t last very long but they sure cause a lot of trouble while they are in the game. I have talked to contractors that tell me “If I don’t get sued once a week, I don’t feel like I’m in business”. I’ve had others show me a list of names they have used in business: “it’s simple really – close up shop, go bankrupt or whatever it takes; get a new name and start up again”. Some even do it in the same location with the same phone numbers and all. Do the companies care? What do you think?
Some people look at flowers and clouds and declare “there is a God”. Others look at flowers and clouds and don’t have a clue and could care less. I look at the property preservation business and declare “this can not be coincidental. Someone is behind all of this”. Have you noticed that within the last couple of months many of the nationals are doing business differently than at the first of the year? Don’t you think it’s strange that several of them have gone to a new RFP system and are demanding contractors work according to the areas the national puts together. It’s no longer possible for a contractor to make his or her own decisions about the areas to be covered.
I have preached and preached that contractors need to have legal representation. Most don’t, saying they cannot afford an attorney and in most cases that is true but I no longer quietly accept that poor excuse. I’ve had the Pre-Paid Legal Services banners and links on our web sites for years. It’s funny though; if they cannot afford an attorney how do they think they can afford to fight something like a $50,000 penalty? – unless of course they are one of the ones that can step into a phone booth and re-emerge as a new company. Bankruptcy can cure a lot of ills for those that are so inclined.
Maybe it’s time I get back on track here. It’s been an exciting last seven to ten days around here. While doing research, trying to find a way for contractors to fight back, I considered factoring and a few other things and started making phone calls. I found out that there are a lot of financial people out there that know a lot more about our business than I thought. Most of the factoring companies told me they had calls in the past from someone like myself and they found that the contracts we sign are so one-sided (in favor of the national) that they would not accept any of them for factoring. That to me was a strong clue that I am right about the contracts being extremely one sided in favor of the national or regional and there is no wiggle room for the contractor.
Having reached a dead end with the factoring companies, I started calling collection agencies – big guns in the industry. Again, most had seen some of our contracts and with as much charm as they could muster told me they were not interested. I finally got in touch with one agency that already had some property preservation contractors as clients! Now, there is no way they could have been prepared for my call. We were on the phone for at least an hour and they said all the things I wanted to hear. They know our business and know they can help a lot of us. I have additional interviews planned and they have agreed to write some articles. Look for them soon.
I have opened comments for this article and would love to hear your comments.