Contractor Won't Bill Me. Advice Please!

[Alecia Loveless]

I've got a great general contractor. In the past 8 months he's worked at 3 of my properties. The first doing odds and ends getting it ready to be sold, maybe about $3000 worth. Then he did a major renovation to the second side of the duplex I live in including installing a shower, laying flooring, and supervising other employees such as the plumber and electrician. This could easily have been as much as a $12-15,000 bill from him. He promised at my insistence I would be invoiced before December 31,2020 so I could properly account for these bills in the correct year. Now he is renovating a third house for me, another $12-15000 project. 

I have yet to receive a single invoice of any kind from him. I have referred him much business and many new accounts but I can't imagine he doesn't want or need this money. There aren't any other reliable, insured contractors in my area that won't simply charge me an arm and a leg for this type of work. He also comes at every emergency I have so I don't want to alienate him or offend him especially as my portfolio grows. 

If anyone has any suggestions on how I should handle this I would appreciate it. 

Thanks!

[Michael Hayworth]

This is odd behavior, but I have seen it occasionally before. It can be a combination of "he doesn't need the money right now" and "he really likes doing the work, but is bad at the business side." I have one subcontractor who works this way - he'll work on several projects for me, then 2-3 months later, we'll get bills for all of them.

I'd try having another conversation with him, along the lines of "Bob, this is really unusual behavior for a contractor. Surely you need the money - can you tell me why you're not invoicing me?" Maybe you'll figure out where he's coming from.

At a minimum, I'd create a separate savings account you don't touch and escrow money over there to pay his bills when they ultimately arrive, so you don't end up spending the money on something else.

[Nathan Gesner]

When you set a deadline, you should always include a penalty for missing it and follow-up to remind them of the agreement. Here's an example:

"Are you able to get the invoices to me no later than December 31? If I don't get the invoices by the deadline, there will be a penalty of 5% reduction on your labor."

You get him to agree to that in writing. You remind him along the way. On December 15th, you look him in the eye and remind him that he agreed to provide the invoices by December 31st or pay a penalty. If he doesn't meet the deadline, you reduce his labor by 5%.

I know some contractors are bad about paperwork, but the fact that you're still waiting on invoices from months back and you still have him working jobs for you tells me this guy is a complete mess or he's getting ready to slam you. What are you going to do if he finally shows up with the invoices and the jobs are 50% more than you estimated or he projected? You have no idea what he's charging for the first job but you've hired him for two more jobs?

[Marcus Auerbach]

Sorry this is not acceptable - I pay most trades on Friday, because everything is still fresh in everyone's memory and if we have disagreements or questions its easy to settle, because we all remember. 

I am concerned he is going to bill you twice of what you expect and then put a lien on your properties if you refuse to pay..

[Alecia Loveless]

Hi Michael Hayworth, thanks for the idea of the escrow account. I hadn't thought of this before. This would definitely be a great idea for keeping the money separate even if I only do it in my bookkeeping software so I am not seeing it in the physical account! 

Thanks! Alecia

[Alecia Loveless]

Hi Nathan G. Fortunately this contractor has worked for me for over a decade so I would be completely shocked and amazed if he brought me a bill that I thought was exorbitantly high. I'm not saying its not possible, because I realize anything is. I realize now that I should be handling these situations differently which is why I posted about it, to get some expert advice.  So thanks for helping me! I've got so much to learn. 

[Alecia Loveless]

Hi Marcus, you've brought up a good point. While I can attempt to lay down the law with this contractor, both the plumber and electrician are also hard at work so I can make sure they are being paid when they want to be paid, every week, or at the end of the job. They only had bout twenty hours apiece so far and came and went as they pleased so I'll be sure to check on that tomorrow.  

No need to perpetuate my bad habit with one contractor onto the others.

In my 20+ years of owning my own businesses pretty much everyone wanted to get paid and made sure to leave their bill or mail it to me. That's why this case is kind of stunning to me. Its not like its a little bit of money. 

Thanks for the advice! Alecia