Good question to ask HIM.

You should write the check out to the entity on the contract. Many contractors are not incorporated, they use a DBA. They are the company.

Also, check to see if his license is current if you haven't checked lately. Make dual payee checks if subs are involved.

Many contractors are not incorporated, they use a DBA. They are the company.

That's the way it is with me. The check can be made out either to me or my company name. It all goes to my business account, anyway. As for your contractor, it may be that he would rather cash the check, instead of deposit it, and if it's made out to the company, it can only be deposited. This could be for a number of reasons. Could be he's been burnt lately by a number of customers and would rather have the security of depositing cash into his account, rather than have all HIS checks bounce due to a returned check. Could also be he's cash poor and would rather not wait (or CAN'T wait) till the funds are available. Those are just two possible reasons. Best bet would be as growlery suggested-- Ask him!

It could be because he is trying to avoid paying taxes. Only make the check out to his company.

Again, I say, ask him. He may have a good reason for it. I know for myself, when I'm working on projects out of town (usually from here or John Bridge's forum), I'll request the checks be made out to me directly only because I want to know immediately if there's going to be a problem, rather than getting all the way back home and THEN there's a problem. it only takes one time to make you wary. I'm not saying that's the reason. Only that there COULD be a valid reason for it. Don't just write him off and demand that the check be written to the company.

As for protecting yourself, so long as you have a receipt (as well as the cancelled check with the memo line showing what the check was for) you're covered with respect to proving you paid for services rendered.

In case there was any ambiguity, the reason I said to ask the contractor is just that people should come right out and ask questions rather than assume anything. I wasn't implying he had some explaining to do.

Women are taught to be very shy about asking questions, particularly about money. Maybe that is not this poster's particular issue, but it may be with some readers.

As I have said before, contractor issues are workplace issues. You're sitting in your corner office at work and want to know why a check is made out in a certain way: What do you do? Pick up the phone and have a low-drama one-minute phone call and on to something else. It's not the Inquisition.

I work with the public and I can tell you a question asked -- even a rude or off-base one -- is much easier to deal with than a situation where you know that the other person has the wrong idea, but you don't know exactly how, so you can't fix it.

If he's straight, he'd almost certainly rather have you ask and clear the air. And if he were crooked, he'd be sure he could flim-flam you with his sweet talk , and he probably could -- for awhile. So just ask. You have nothing to lose.

I understand that people come here to kind of walk through possible answers before they do go and ask, so they don't put their foot in wrong, or to see if people's answers make sense. That's good.

But hey, just because Bill has given you a perfectly reasonable answer for why HE might do it doesn't mean you don't deserve an answer of your own from your guy.

So many situations on this board would be averted if people just talked. Keep it simple, casual and friendly -- no coffee or sit down needed -- and you'll be fine.

Good luck!

So many situations on this board would be averted if people just talked.

Exactly.

You're right growlery....I am just one of those woman, unfortunately. I have such a hard time questioning my GC on anything. And Im pretty much running the show as my husband travels quite a bit and isn't home much. I think its a self-esteem issue for most, at least for me it is. I feel like I shouldnt question the BIG, IMPORTANT, GENERAL CONTRACTOR--even though he doesnt present himself in that way!! Its MY problem, not his.
Well, I am learning to tell myself that we are spending ALOT of money and I have every right to question every little thing if I want to. But its still hard for me. I work on it every day. I could totally see myself not wanting to ask "Why do you want me to make the check out to you instead of your company?"

Thank you everyone, once again. Yes, I am exhausted dealing with this GC. I almost feel like I am being pushed around. And when he pushes, I growl, so it has been exhausting. Yesterday, he wanted to stop by with another bill, and I asked him to come today, (husband home; usually out of town) and he said he could not make it(lives 15 mins from me) I offered Sunday; no can do. So he wants to come Monday, and I told him I would like to review bill with my husband first. Still waiting for an email. Also, he took all my old recessed lights (2 years old) and put them in his van, his worker tells me. I wanted to reuse them. Learned he was remodeling his own home, and he still has not returned them. I am beginning to feel very uncomfortable with his practices. It just feels like something is off. an cawfeegirl, you are right, it is A LOT of money. I don't like to deal with people who are so money hungry that they won't admit to their mistakes and correct them without charging you for them. He keeps saying "I need to make a profit" when I have already given him 12,000 and job isn't over. I have had many discussions with him, and it seems at every stage there is a new problem. That is why I am beginning to question why he wants me to write the check in his name and not his company name.

You should never feel you are being pushed around by your contractor. Its your home, and your money. My husband, who is a GC, says, alot of contractors have no people skills. You have to treat people like you want to be treated. Because of the way he, runs his co, his business is mostly by word of mouth. And his co is very busy in this economy. sharaz

My contractor requested cheques in his name. I just plain came out and said, "How come in your name and not your companies?" His answer was pretty much exactly what Bill said. Just ask!

I hear you about the female reticence to speak up. Would it be easier to start with a very simple one sentence statement of fact: "Our contract specifies payment to (name of his company)." followed by a positively-framed question: "Why does it work better for you to do it differently than we agreed?"

Do you think if you practiced saying just those two sentences out loud a few times, it might be workable to then say them to him with some confidence in your voice?

A good friend of mine often says, "They can't walk all over you if you won't lie down on the floor."

And, send him a WRITTEN notice/request to return the lights. Perhaps even write that they were never intended to be a "gift" for his personal remodeling project, but were always intended for you own use. Anything in the paper trail will be useful later, if needed.

Nothing makes me angrier than a contractor or GC who says they are not making money on my project. I would get flagged here for the words I feel like using regarding that particular line of conversation. It just isn't my problem if a contractor can't figure out how to price a job properly or run it efficiently such that he can turn a profit. How do all these whiners stay in business?!!

(rant off) sorry...

I don't think receiving a personal check would help him avoid taxes, at least not intelligently (not that it is ever intelligent to cheat on one's taxes). There would still be a record that a check was cashed or received into the personal account. I would imagine that if he were ever audited they would check both accounts. They also look at lifestyle vs. income. Then again, something like 90+% of those who are self employed supposedly cheap. But I imagine that is mostly by receiving cash or exaggerating expenses (such as having their personal landscaping costs billed to their rental property, etc.).

Back to the regularly scheduled programming...

Smiling, I am going to do that. Thank you. I am not the type of women who is afraid to speak up, it is just that it is so exhausting to do it time and again.

I did put the request for the lights returned in writing. 3 weeks later and he has returned 2 of 9 so far. How do I know if they will work? Now I just received another "extra" bill. He is foolish; reputation is everything. I am so sorry I did not follow up on references. He gave me 3 but I did not bother to call them because I "trusted him." I was foolish too. I will never do that again.
Anyone starting a project: Call at least 5 references. Get details.

Now I just received another "extra" bill.

Send him a receipt stating "Paid for in light fixtures".

Did you get an answer regarding the name on the checks? It might be that his bank charges for a commercial account and won't deposit or cash checks made out to the business to his personal account.

Just calling references is not always effective. Sometimes clients will hold back info because they are trying to get their job finished or other similar reasons. Actually visit the project and see for yourself. If no one will allow that, then find another GC.

If he doesn't return the lights, estimate the cost and let him know you will deduct that amount by putting it in writing. The situation you have described is pretty common when working with a GC. It shouldn't be, but it is and there have been a lot worse situations posted. One of the things they count on is you getting tired and just paying or putting up with this stuff.

kitchenconfidential - References are important. One person who bid our kitchen that we did not go with had a long list of references (he was a builder, not a Wood-Mode builder/dealer) but when we called on them, none of them had been kitchen installations :-P He had tried to make them sound on his references list that they were all kitchens!

I might add that you need to go and see projects -- finished and otherwise- - see the quality of work for many jobsites. Be sure to look for all the installation details. Don't be shy about opening cupboards and looking under, over and around installations - - don't be wowed by design so that you don't see how the kitchen was put together.

We were too polite about really looking hard at people's kitchens.

Make sure that the references/finished projects/job sites are not family members or best chums, too. We got fooled by that trick.

Ask if he'll give you a discount for cash.

Cash? He's getting a check and I notice it is cashed immediately. He's probably going straight to the bank. Just got his latest extra bill. He did not have wiring ready so when my appliances were delivered, they would not install. He thinks he is being a nice guy by only charging me $50 when it was his mistake, and the only reason it is only $50 is because the plumber told him he wasn't charging me, to which he responded: Now I can't charge her; you shouldn't have done that. I was supposed to have a cell phone draw. Well wiring was not pulled up before stone was installed. Now he is charging me $60 for that. He has a bunch of little bills like that. He is nickel and diming me to death. I will never take on another contractor without doing just what was suggested here, going to former jobs and checking thoroughly.

He is asking for the check to be made out in his name and then he goes to your bank and cashes it, that way he thinks he can avoid paying some taxes. Make sure you have him sign a conditional progress payment release each time you give him a check, have him sign an unconditional progress release for checks he has received to date and make sure you have not re3cieved any 20 day prelim notices too

Right. That's why, if he's dealing the "underground economy," you should at least get a discount for abetting his efforts at tax evasion. Just my two cents.

He did not have wiring ready so when my appliances were delivered, they would not install. He thinks he is being a nice guy by only charging me $50 when it was his mistake, and the only reason it is only $50 is because the plumber told him he wasn't charging me, to which he responded: Now I can't charge her; you shouldn't have done that. I was supposed to have a cell phone draw. Well wiring was not pulled up before stone was installed. Now he is charging me $60 for that. He has a bunch of little bills like that.

HANG THE HELL ON HERE-- That's the whole reason a GC gets paid the extra markup on everyone else's invoices-- because he's resposible for the scheduling of the trades so everything flows nice and smoothly! If he's charging you AGAIN on it, call him on it and refuse to pay it. If he gives you any grief about it, send his a$$ PACKIN and find someone else to finish the job!!

He didn't get a markup on the appliances. I ordered them. He also did not get a markup on the granite/marble. Again I ordered that. He says he did not get a markup on the floor: I don't know, because I paid him; ditto with the painters. Electrician, I paid him a fee, the electrician, and a helper, and on the first bill he had an extra 15%.

What is an unconditional progress release and what is a 20-day prelim notice?

Thanks for the help.

Not sure on either, but I don't like the sound of either one.

20 day prelim notice (might vary by state) - within 20 days of delivery of services/goods, a 20 day notice is sent to the homeowner announcing that a contractor is making a claim for potential lien. Makes it easier for the contractor to attach a lien to your house in the event of unpayment by the general contractor or homeowner.

Example: We put in a new water heater in a property (not our home). The water heater was delivered by the plumbing supply house. Our favorite plumber had ordered it from his usual place. This particular supply house always does prelim notices. It was nothing personal. So, we contacted the supply house. They requested a dual payment check and said this is the usual way they do their lien releases. We made the check out to both the supply house and the plumber. The plumber took the check to the supply house, settled with them and kept the rest. Bottom line: make sure your subs get paid by the general - for both labor and materials. Unscrupulous contractors might not pay the subs and material houses.

Material and labor releases / conditional or unconditional releases- always good to get when you pay a contractor. In some cases, the contract may have built in protection on the material and labor releases, but it can't hurt to have the contractor certify that he and his forces has been paid in full for all material and labor for the portion of the job that you are paying for. You do not sign the material and labor release - the contractor and his employees do.

In California, unlicensed contractors have no lien rights.

That's what I thought, but I wasn't sure. We just did a good size residential project in Andover, Mass., and the GC was slow in paying (we completed on 9/11, and we'll be getting the final check tomorrow). I'm used to the lien laws up here in Maine, where you can file a lien up to 90 days after completion. Down in Mass., I guess there needs to be what you called the preliminary intent filed within 3 weeks from the end of completion, or you don't have a leg to stand on.

In some ways, I actually prefer to know what the subs need to be paid, so I don't see a 20 day notice as a bad thing. I'd rather make sure subs are paid sooner rather than find out later that the subs have huge unpaid bills with the general.

Some sources also say that it is a good idea for you to get from the general a copy of the invoice from the subs marked paid.

@Patrick Keohane - First, there is no reason to resurrect an eleven year old thread for that rant.

Next, you note, "Anyone familiar with small business ownership and taxation knows claiming that writing a check to a contractor in his or her name to avoid taxes is utterly ridiculous and ignorant." Well as a CPA, a small business owner, and a property investor... that statement is completely false. Are you suggesting an audit of a schedule C filer isn't going to track revenues to the business account? That is actually ignorant and ridiculous.

Finally, it does matter who the check is made out to. As noted, it should always be made out to the entity that is named in the contract. It does matter for several reasons but moreover the contractor is asking for a contract modification... which is ironic in a rant about customers asking for more.

Another Zombie Thread. 🙄

Let's shine a spotlight on that last bit of belligerence and let people decide idiot status for themselves.

It is next to impossible to fully understand the capital structure of the company you are contracting with, between partnerships and assignments the distribution of ownership rights are simply unknown. When you make a check out to a person rather than the contracted company you are in breach of contract against any other party with an interest in the company.

Those parties can sue you for breach even though you paid the contractor directly and they will, because you are likely more solvent than a stealing partner. You can then sue the contractor to recover your loss, but good luck with that.

Property investor lmfao... I will break it down for you. I have quite a few rental properties and hire people to work for me fairly often, I might ask them to do things like haul junk out of a yard and I don't think it unreasonable to expect them to have a line of credit with those they do business with. One great thing about small business is you get to decide which jobs you will take, if you have consistent problems with people abusing you, I submit that you are the constant in that abuse and not your customers.

Of course, people should feel free to ignore my advice and take someone else's. Honestly, I typically recommend that people get their contract law and tax advice from a handyman.

P.S. I don't really have a problem with reading comprehension I simply chose not to read most of your post. I could pretend it was a wall of text thing, but really it was so wrong from the get-go that I only had to read a few random bits to spot sufficient problems to discount the whole thing.

@Patrick Keohane - I have years of posting here to back up my claims and so the people on this forum can decide for themselves.

Your example simply shows why you should not be commenting on this thread. My father owned a plumbing company with someone else's name on it. He first joined as a minority partner and later became the managing partner, the person whose name was on the company eventually left altogether.

So let's use your example, as I am sure you are aware, LLC's are a durable business entity. Therefore, using your example, Billy's Bob can admit new members to the LLC at will. So Suppose Billy Bob has a cash shortage and offers his brother-in-law Willy Rob a 20% share of Billy Bob's Badass Remodeling, LLC. He is no longer a single member LLC but because it is a durable business entity, he typically doesn't have to file anything new (we might want to note that LLC's are State entities and not Federal so each state may have different rules but I am not aware of any State requiring a refiling when admitting a new member, so it doesn't matter what he writes under it). So now, Billy Bob isn't the sole owner of Billy Bob's Badass Remodelling, LLC.

Now suppose Nancy signs a contract with Billy Bob's Badass Remodelling, LLC. to remodel her home, but she makes out checks to Billy Bob rather than the LLC. Willy Rob finds out about this and is upset because Billy Bob has not been giving him his share and goes to see his uncle who is an attorney. The uncle, realizing that Billy Bob is judgment proof, sues Nancy instead for breach of contract for not paying the company as she agreed to in the contract. Nancy is clearly in breach of contract and will have to pay, she, of course, can turn around and sue Billy Bob for his theft but we already noted Billy Bob is judgment proof.

I can assure you that I am correct but you are likely not going to see that because you seem to believe that your relatively myopic experience with your two businesses gives you a complete picture. The reality is that you are not an expert on small businesses, you are an expert on your small business... and that in no way qualifies you to comment on business law.

I believe you are making the point that if an employee/owner can accept cash, then that same employee/owner could accept a check that he converts to cash. While that seems perfectly logical it is not correct, checks are assignable financial instruments and cash is not. It really has to do with due care... a business is negligent in their duty if they let anyone accept cash, you are negligent in your duty if you assign a check to someone who is not authorized in the contract.

ETA: I am not going to respond further to this thread. It was dead and buried before the resurrection and there is no reason to bring it back from the dead for this rant.

I have thoroughly explained one of the reasons that you want to write checks to the contracted entity and that alone is enough to overcome your assertion. Meanwhile the only retort is ad hominem attacks. You have offered no rebuttal to any of my points just pretended that attacking my credibility is sufficient to ignore those points. My argument doesn't rely on credentials to be correct. So feel free to explain why I am wrong if you can.

Mr. Keohane, please go away unless you wish to start a new thread and ask for help. That is what this discussion board is for, and most of the posters — like bry911 and myself — have been here for 10 years or better trying to help people, and asking for help ourselves.

You have resurrected an old thread merely to post a rant pertinent to nothing. Most of the original posters are long gone, taking their problems with them. Please do the same, or make an attempt to contribute in a helpful way to the current threads. Thanks.