3 Things You Can Do to Ensure Timely Payment for Services

As a contractor, you work hard on construction sites. Unfortunately, you may have to work equally hard to collect payment. Some project owners ignore invoices, dispute them in the hope of getting a better deal, or claim that they can’t pay until their own financial situation improves. Whatever the reason, you did the work and now they’re reaping the benefits while your invoice goes unpaid.

It’s a frustrating situation to be in, but you are not without resources or remedies. Below is an overview of 3 things you can ensure timely payment for services on New York construction projects.

1. Have a Detailed Contract

Your contract should detail all financial arrangements and obligations, such as: 

  • A payment schedule or list of milestones that trigger a payment
  • The amount of the installation payment (or its percentage of the entire contract value)
  • Who can approve add-ons and how the cost will be added to the payment schedule
  • Penalties for late payments, such as interest and finance charges 

If you’ve never worked with a particular client before and/or the project is more speculative than most (such as a retail space for a new and unknown brand), you can restructure the contract to request a higher amount upfront. If the client refuses, it could be a sign that you’d have an equally hard time collecting the rest of your money.

2. Ask for References

Another way to ensure timely payment for services is to confirm that the client pays their bills promptly. Ask them for the names of contractors they’ve worked with in the past or look into their other projects. If anyone warns you that the client is a late payer or, even worse, nonpayer, think twice about accepting the job offer.

3. Make Invoice Payment Easy

Project owners are busy and can forget to pay, especially when you send a paper invoice that ends up in a pile of desk clutter. Consider switching to electronic invoices, which can be sent and received in seconds. If you include a link to an online payment portal, the likelihood of being paid immediately goes up.

What If a Client Doesn’t Pay?

These tips can increase your chances of getting paid, but what if the client ignores your invoices and stops responding to calls or emails?

Start by sending a polite reminder, such as a past-due notice with a copy of the invoice. If there’s no response, consider sending a Notice of Intent to Lien. Although this notice is optional in New York, they are often successful at producing payment and sparing you the time and expense of filing a mechanic’s lien. Studies suggest that half of clients will give in and pay their bills rather than deal with the inconvenience of a lien or other legal action, so you may not have to take further collection action. 

If the client still does not pay, you can file a mechanic’s lien within eight months of last providing services or supplies (four months if you worked on a single-family home). The mechanic’s lien places a claim on the property, making it difficult for the client to refinance or sell it. 

Unless you apply for an extension of the lien, you have up to one year to foreclose on it, meaning that you compel the sale of the property so that you can be paid from the proceeds. If the owner has not paid up to this point, enforcing your lien rights is the only way to get the money you are entitled to.

Work With a New York Mechanic’s Lien Provider

At NYLiens, LLC, we support contractors by sending and recording professionally-prepared Notices of Intent and mechanic’s liens within the appropriate deadlines. We have helped many clients recover full payment. For more information about how we can assist you in getting paid for your work, please contact us or call 718-444-LIEN.

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NYLiens LLC

For over a decade, NYLiens LLC has prepared and filed Notice of Mechanic’s Lien documents for all types of contractors and suppliers throughout New York State.

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