{"id":896685,"date":"2019-11-12T09:34:55","date_gmt":"2019-11-12T16:34:55","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=896685"},"modified":"2019-11-12T09:35:04","modified_gmt":"2019-11-12T16:35:04","slug":"contractors-struggle-with-cash-payment-terms-could-benefit-from-legal-advice","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/contractors-struggle-with-cash-payment-terms-could-benefit-from-legal-advice\/","title":{"rendered":"Contractors Struggle with Cash &#038; Difficult Payment Terms, Could Benefit From Legal Advice, According to New Survey"},"content":{"rendered":"\n<p>Scott Wolfe | <a href=\"https:\/\/constructionlawva.com\/contractors-struggle-with-cash-difficult-payment-terms-could-benefit-from-legal-advice-according-to-new-survey\/?utm_source=feedburner&amp;utm_medium=email&amp;utm_campaign=Feed%3A+ConstructionLawMusings-RichmondVa+%28Construction+Law+Musings-+Richmond%2C+VA%29\">Construction Law Musings<\/a> | October 18, 2019<\/p>\n\n\n\n<p>Getting paid in construction is slow, hard, and stressful, according to a survey conducted by\u00a0Levelset\u00a0&amp;\u00a0TSheets by Quickbooks\u00a0that polled over 500 construction professionals. Half of the contractors surveyed complained that they did not get paid on time, which caused serious cash flow issues that negatively impacted their customer relationships and frequently forced them to dip into personal savings and lines of credit to keep their business afloat.\u00a0View the 2019 Construction Payment Report <a href=\"https:\/\/www.levelset.com\/blog\/2019-national-construction-payments-report\">here<\/a>.<\/p>\n\n\n\n<p>Unfortunately, since the construction industry\u2019s slow payment problems are well-documented, this sad reality isn\u2019t too surprising. The findings, though, do demonstrate a massive cash crunch for the 1.5 million+ contractors in the United States, and underscores the importance of having legal\u00a0help and counsel from a construction lawyer\u00a0before, during, and after jobs.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Payment struggles are the status quo for contractors<\/h4>\n\n\n\n<p>Dealing with payment struggles is&nbsp;<em>not<\/em>&nbsp;something that afflicts only&nbsp;<em>some<\/em>&nbsp;contractors. The Levelset &amp; TSheets survey demonstrates that cash and payment struggles affect nearly every contractor, and managing these payment challenges is a day-to-day reality for them.<\/p>\n\n\n\n<p>Here are some eye-opening stats from the report:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Contractors don\u2019t get paid on time<\/strong>:&nbsp; About&nbsp;<em>half<\/em>&nbsp;of contractors in the United States reported that they frequently do not get paid on time;<\/li><li><strong>Contractors have to fight for payments:&nbsp;<\/strong>Nearly every contractor (98%) had to threaten a lien recently to get paid, and more than half (58%) had to file a&nbsp;<a href=\"https:\/\/www.levelset.com\/mechanics-lien\/\">mechanics lien<\/a>&nbsp;to get paid.<\/li><li><strong>Contractor\u2019s don\u2019t get paid in full<\/strong>:&nbsp; Almost 40% of contractors frequently do not get paid in full on every job, complaining that back charges, deductions, and other withholdings frequently get tacked on after the job is finished;<\/li><li><strong>Payment &amp; Contract Terms are problematic:<\/strong>&nbsp; Contractors also report that their contractual terms are problematic for payment. They struggle with retainage requirements, they are forced to take discounts and rarely earn interest for non-payment, and they have to wait<\/li><\/ol>\n\n\n\n<h4 class=\"wp-block-heading\">Handling payment challenges requires legal help &amp; experience<\/h4>\n\n\n\n<p>It\u2019s interesting that contractors are experiencing payment challenges that really could benefit from legal help &amp; experience.&nbsp; According to the report, contractors are stressed about issues that could be better addressed by the parties&nbsp;<em>before<\/em>&nbsp;the job begins, and&nbsp;<em>before<\/em>&nbsp;payment problems escalate out of control.&nbsp; And specifically, they could be addressed with some legal assistance.<\/p>\n\n\n\n<p>First,&nbsp;<em>before<\/em>&nbsp;the job begins, contractors can set themselves up with more attractive payment rights. Of course, it\u2019s always the case that the owner and\/or general contractor has a good bit of leverage in contract negotiations, but it is our experience that there is&nbsp;<em>always<\/em>&nbsp;room for some positive changes to the construction contract.<\/p>\n\n\n\n<p>These changes can mitigate the effects of&nbsp;<em>pay when paid<\/em>&nbsp;or&nbsp;<em>pay if paid<\/em>&nbsp;provisions and improve payment timing, or position your company to have less retainage withheld or to shorten the time of withholdings.<\/p>\n\n\n\n<p>Before the job begins, legal counsel can also help you better understand what you can expect on the job. Knowing what to expect can be extremely helpful to manage cash flow expectations. Counsel can help you understand the likely payment scenarios you will encounter on a job, and even help you read through the\u00a0payment behaviors of the general contractors on the job\u00a0to prepare your company to work with the other parties.<\/p>\n\n\n\n<p>Second,&nbsp;<em>after<\/em>&nbsp;the job is underway, but&nbsp;<em>before<\/em>&nbsp;payment problems are out of control, legal counsel can help you get the right attention to your claims. This will help contractors get paid without having to resort to threatening a mechanics lien, or worse, to file a mechanics lien.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Scott Wolfe | Construction Law Musings | October 18, 2019 Getting paid in construction is slow, hard, and stressful, according to a survey conducted by\u00a0Levelset\u00a0&amp;\u00a0TSheets by Quickbooks\u00a0that polled over 500 construction professionals. Half of the contractors surveyed complained that they did not get paid on time, which caused serious cash flow issues that negatively impacted&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/contractors-struggle-with-cash-payment-terms-could-benefit-from-legal-advice\/\">Continue reading <span class=\"screen-reader-text\">Contractors Struggle with Cash &#038; Difficult Payment Terms, Could Benefit From Legal Advice, According to New Survey<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,201,10997],"class_list":["post-896685","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-general-contractors","tag-legal-advice","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Contractors Struggle with Cash &amp; 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