You ask for a lien waiver when you make a payment to the GC. The GC would need to get waivers from the subs when he pays them.

I provide lien releases to those who request them within 15 days of their progress payment to me.
If they seem to have a problem with the timeline I simply advise the buyer that this is how it is. I, we pool builders, don't pay out of our pockets for the work performed at a jobsite, the purchaser's money does, and the invoices are usually satisfied within 15 days of payment.

Note to all pool buyers, if you ever get pushy and request lien releases prior to making a progress payment you'll usually regret it bigtime. There's a certain amount of trust involved in these proceedings. I trust a buyer to pay me after I've dug, steeled, and gunited. The buyer extends an equal amount of trust that I, the builder, will promptly compensate the tradesman for the work performed.
As you move towards the next payment stage you should have your lien releases for the service providers involved prior to the previous payment, but not those trades which are post first progress payments.
In the end, once final payment is received you'll get an unconditional release of lien from the contractor of record, your GC the pool builder.

See ya,
Kelly

hahah, Kelly, you sound just like my Accountant wife! I think I will use some of your wording for our pool construction contract! You are right though... clients need to understand our view also. Unfortunately the clients are afraid as well... How do they know you are not going to be the next PB in the paper or on TV for going out of business.

I think if all concerns are addressed before moving forward with the contract and construction it makes for a much easier build and everyone comes out happy.

Jason

Thanks for all the input guys. Many good points here. I agree with you Kelly that much of it has to do with Trust, but being a contractor myself I know I have to earn that customers trust from the start as well as during the job. I have done projects that went over $50K and had no problem if a customer asked for a lien release at time of payment, also have had higher end projects ask for insurance proof, trade history ect. Never has made me feel defensive or that the customer would get less then a perfect finished product. From your reply it sounds like if I was to request or question my PB on this and my timing was not right I might just get a bad product or "regret it" I hope I have aligned myself with a PB of much high caliber. I can see waiting to ask for the release until payment is made, but if I am handing the PB a cashiers check for a 1/3 of this build and he can't provide me with a lien release for the work I just paid for within 2 business....then we have a problem. This is were the trust between the PB and his Sub's come into play. If that relationship is there and strong and solid then their should not be any issues with the Sub signing a lien release as he is loading up his equipment.

Again thanks for the opinions, this is a new venture in construction that I am not very educated in and wanted to make sure I was taking the right steps at each phase of the project. In my contracting world I don't require payment until the job is completed, even those that are over $50K. But with that said I don't have 5-10 jobs going at the same time that can be in this range, so we are talking about two different worlds to some degree.
Thanks.

If you state up front that you will want lien waivers there should be no trust issues. It is a standard practice for commercial projects and should be for residential work as well.

quote" From your reply it sounds like if I was to request or question my PB on this and my timing was not right I might just get a bad product or "regret it" "quote

I proofread my reply twice to hopefully make sure what I was trying to get across came across in the manner I meant it to.
If someone will not pay me my gunite draw (it's a big one) I STOP construction and will not move forward on the project, PERIOD. (home builders included) Whether I have the money to pay these invoices or not is irregardless. The contract states that the draw is due upon completion of the work described, not upon providing lien releases for work I've yet to be compensated on.
If you came to me and stated that you wanted your lien releases in 48 hours I'd tell you to come pick up the subs checks and personally take them to the office of my service providor, otherwise the checks will be cut on Friday and go out to them then. Allowing an additional week for mail time and for the deposit time typically works out to about 15 days max. I juggle way to much work in the busy season to be hung out on a limb to be paid for work I performed the week before last. I'm not in the business of short term financing the pool, the buyers progress payments handle these invoices. I won't present the next invoice for a draw until all the subs involved prior to the previous invoice have delivered their release.

I hope this clears up what I was trying to describe.

See ya,
Kelly

Thanks Kelly for your educated insight. I don't think I ever mentioned not paying the PB for any certain phase of the build or that any payment was predicated on the issue of a lien release for that aspect of the build. I would just sleep better knowing that each major sub was paid soon after that aspect of the build was completed and paid for. Two weeks just seems like a stretch, since the whole build is 4-6 weeks in most case weather permitting. As I stated I don't have any real concerns with the financial state of the PB we went with, was just curious and want to make sure all bases were covered with this major addition to our home. With the economy in the state that it is in, though it looks to be making a turn in a more up direction, I just want to cover myself with all aspects of the project.

I have had to file mechanics liens on a couple of major custom home builders in my area that I did complete garage makeovers for and staged their model homes garages. The process is not an easy or cheap one to do, primarily time spent on paperwork and the lawyer fees.

Hope I did not offend you Kelly or any PB here, that was not my intention at all, mainly just wanted to be educated on the whole lien release issue as it pertains to pool build and the Subs.

Thanks.

quote" I would just sleep better knowing that each major sub was paid soon after that aspect of the build was completed and paid for. "quote

It's a shame that more buyers don't adopt your mindset when moving forward into construction projects of this magnitude.

quote" Hope I did not offend you Kelly or any PB here "quote

You can rest assured that you didn't. What I, we pool builders, do is simply business. Quite honestly, I had 10 pool buyers this past year that could have been further ahead of the 8 ball if they'd have adopted the same mindset that you have already embraced. It truly breaks my heart when I come and quote a finish up behind another pool builder or an owner/contractor who got taken by some the scoundrels within the industry that I compete with. There are many good men and women who are my competitors that I bid against in the design and quotation process. You'll never hear about them when the $hit hits the fan, it's only those who conducted poor business relationships between a buyer and a seller.

quote" I have had to file mechanics liens on a couple of major custom home builders in my area that I did complete garage makeovers for and staged their model homes garages. The process is not an easy or cheap one to do, primarily time spent on paperwork and the lawyer fees."quote

I'm sorry that in your line of endeavors that you've had to experience this. I've found that no matter how many Judgments I've been awarded, the Lawyers always win. I pay them and get compensated much later from a Title Insurance company when my buyer makes the sale on his property. They usually cop an attitude when calling my office to bich about the way it went down.

Like I stated earlier in this post, this is nothing personal, it's simply business.

Congrats on the new pool!!!
I can promise you this,
A pool in your backyard is much much more than just the swimming. Everything from a cup of coffee in the morning, reading a book in the afternoon, to a dinner and some cocktails socializing with you friends in the evening is greatly enhanced when conducted poolside.
Everything in my, and my children's lives, has always been done poolside.
I don't say this just because I'm a pool guy, I'M A POOL KIND OF GUY!!!

See ya,
Kelly

Kelly,
Thanks for the reply. I agree with you with regard to the lawyers being the winners on a lien. Their have been a couple of custom home builders that I just wrote off the job as a loss, all the time and lawyer fees would not have made it worth the while. It's weird never have been burned by a homeowner, but have been by a couple of builders, I now require 50% deposit on any builders I do work for. Many don't like it and have had a few that buck it, I just tell them they can always go with a lower caliber contractor and take their chances. Homeowners I almost never ask for one....that is unless I get burned a couple of times, has not happen yet, knock on wood.

I like how you summed up your reply, have never thought of the future pool in those terms...but it sounds great! We can't wait to start the landscaping and the continued process of transforming our back yard area....I think I have my work cut out for me for the next 10 years.

Thanks again for the input.

JD

quote" Their have been a couple of custom home builders that I just wrote off the job as a loss, all the time and lawyer fees would not have made it worth the while. "quote

I'm sorry but I completely disagree with this mindset.

Even if I doubly lose money on the deal (job sale price plus attorney & court cost filing fee's) I still pursue them. A Lien on the Property plus the Judgement against them will make it damned difficult to move the property and acquire future credit. When they beg for terms I don't budge, it's 100 percent here and now plus my incurred fee's too.
When they move into bankruptcy court I won't take the 10 to 20 cents on a dollar offer to the creditors. They can charge off the Judgement, but the Lien on Real Property in the State of Texas stands. If you take the Trustee's offer you relinquish all future rights.
Truth is, I don't want to do any more business with them even if they do pay.
You, as a Contractor, have rights, but only if you stand up and fight for them.
As a young mechanical contractor subbing from pool builders, I'd call my wife and tell her to put the Bondsman on standby. Then I'd stalk the worthless peckerheads, jump out on them at a gas station or local store, whip the snot out of them, and flee in my truck to somewhere I could park, call the cops, tell them what I did, and wait to get arrested for assault. They always had already received a call from the victim identifying me as the assailant. They never mentioned to the deputy taking the report why they were assaulted, and it was always the first thing I mentioned. Several times I was fortunate enough to ride in the front seat of the cruiser uncuffed.
The fee for a 500 to 1000 bond plus the misdemeanor's fine was a small price to pay for the satisfaction.

I've matured a lot since my 20's and early 30's, LOL!!!

See ya,
Kelly

Those worthless peckerhead college boys should hear that story!

So, I think I understand why a reputable builder would not want to furnish lien releases before getting paid - that reason being that they have to float more money (pay the sub and hope the homeowner is prompt), and that cut's into profit and/or raises prices (which cuts down on business).

What I don't understand is what protection the homeowner is afforded for the less than good builder when confronted with a lien put on the property by an unpaid sub.

Well Kelly I just turned 40 and my butt kicking days are about 20 years behind me I think, though I do get a pretty good ass kicking from a 5yr old on a nightly basis :)

The couple I was burned on were less then $3500 and that was their invoice cost, not my materials and time. So now just walk alittle more carefully when I am dealing with these med. size custom home builders. What's weird is the builders that are down a few levels in home price actually always paid well and upon job completion. It was the guy in the $600K-1.5mill that would stiff guys. Now once I did go back and tore out all my garage cabinets out of one of the model homes I did that did not pay, the door was open and it was Sunday so I just backed the trailer up and took the screw gun to them, less then 15 min later we were gone.

It is a shame some contractors conduct their business in such a way and not pay fellow contractors. Like I said those I tend to steer way clear of or throw the bid so high that i scare them off.

In AZ you have to file a 20day prelien to be able to have the priviledge of filing a lien if necessary. Customer gets a letter in the mail letting them know that they have been preliened, so they could keep track of who can place a lien.Most Generals prelien the customer, but the subs dont, so they cant put a lien on the customer. We supply a Conditional release with every payment and then a Unconditional after the final payment has cleared. Makes for an easy system.

quote"In AZ you have to file a 20day prelien to be able to have the priviledge of filing a lien if necessary. "quote

In Texas we send a 10 day Intent to Lien letter, this is what I was describing when I talked about a builder boo-hooing for terms. You stand fast because if you accept any portion of compensation you relinquish any and all future rights.
I pay 125 for the letter to be cut. It carries a lot more clout on a Real Estate attorney's letterhead than a letter from my office.

quote" It is a shame some contractors conduct their business in such a way and not pay fellow contractors.
AND
quote" Most Generals prelien the customer, but the subs dont, so they cant put a lien on the customer. "quote

Some GC's use this to their advantage because they know that many subs are unaware of their rights and the timeline. By not following protocol the sub forfeits his rights to be compensated. The GC was able to keep the subs money and the homeowner is protected from the sub because the GC was paid.
If this isn't a man who deserves his just reward, I don't know who is.

I should have never posted what I did when I found myself in that position.
What I did was WRONG. All I saw was RED and all I could think about was the fact that I had to pay for my materials and my manpower, and that I'll never collect from either the builder, or his buyer, the homeowner.
I expressed this extreme anger and frustration in fists, knees, elbows, and head butts of rage to a few men that thought they phucked me over and were really going to get away with it.
I was truly lucky the nobody was really hurt because it happened several times and I never got sentenced, it was always fines.
At that time in my life I was proud of my actions and am now slightly ashamed, I was in a learning curve of how to conduct proper business then.

See ya,
Kelly

Kelly,
I have felt your rage, and wish I did what you did, but I know the temper causes more trouble.

I have been hosed twice in my career. Once when first in buisness and nieve, and once last year for 10K when a GC failed to pay. This was not the GC's fault exactly it was the owner who lied to the bank and stole the money. House went into foreclosure so a lien does no good. This was his MO. He did this with 20 to 30 contractors on many homes he was building. I let my guard down because this was the brother of some friends of ours whos pool we also built, as well as his parents.
Even know this was clear fraud and theft the bank doesnt care, and the authorities wont do anything about it. I even tried shame telling the friends,and parents what he did. They didnt want to know.
I should of taken all the equipment back, but that is illegal--------Go figure.

I believe in Karma, and boy is his coming.

Kelly,
I think that it depends on the pool builder as to when you ask for lien releases. There is another builder stuggling in The Woodlands right now, and you know who it is. You have been around forever, know every aspect and have a stellar reputation. I too have finished pools from the builder with one letter and one number last year. I think that it is smart that homeowners are starting to think of lien releases more and more.

I saw a previous post where you recommended pool builders and they are the only ones that I would trust.

Homeowners, If your builder offers pebble tech that should let you fell 80% comfortable that they are not crooks. There are only 2 pebble applicators in town so it is not that easy for them to switch when they no pay.

I would disagree with the Pebble Tec statement. I can and do use both of the applicators you describe. But I only use Pebble tec when the customer insists on it. Other wise I use Wet Edge, Or even River Rok. I find that the pricing difference is enough to offer several options. When you are tring to provide a quality product and still stay within the Customers budget it only makes sense. All three of the aggregate providers that I use have the same warranty. and in some cases like Wet Edge I find there are better options.

PoolTech,

Thanks for the kind words!!!

I finished 4 behind that company last year, quoted 3 more and will probably capture 2 of them if they can get the money in order. The sad part is that I lost at least 5 of those units on the initial design and quotation phase.
I really do feel for the buyers when they get burned and it frustrates me that I wasn't good enough to be their builder of choice, but I was first choice as the janitor builder to come mop up the mess. I quote 'em just the same and put them in rotation just the same as if they signed in the beginning.
The original owner of that company and I go way way back to the early 80's, he was heartbroken that the guy who bought the outfit from him ran the company into bankruptcy. That dude burned him too and he has since had to sell the office building to a buddy of ours who owns a Century 21 franchise that got displaced from his office building due to Ike damage and the City of Shenandoah condemning it and not allowing a reconstruction permit.

Irish,
When I spread some pools with the Wet Edge price list the slight price savings weren't enough to warrant me moving away from my P-Tec applicator whose family I've known and worked with since the mid 80's when they bought MMG. I've known both Wet Edge applicators almost as long but never have conducted business with them. I'd feel pretty certain they put me on a "B" schedule price list and not the preferred "A" price list.
I do agree with Irish about not judging the caliber of builders by their choice of plaster, I know good men who use Wet Edge.
I know people want pools and I know they're apprehensive.
Our industry has been exposed to a bad light lately.
Potential buyers should really check out their builders well before signing, my suggestion is asking for the names and phone numbers of at least 10 to 15 of their brand newest pools. Call the people and ask to meet at the unit with them in the builders absence. If I builder wants to chaperon you to someones house I'd pass. You'll get MUCH better feedback with him not around. I've found my people to be very gracious, they were recently in your shoes too.

just-a pb,

quote" I should of taken all the equipment back, but that is illegal--------Go figure. "quote

This is the same in Texas.

Garageworks could have placed himself in a very bad spot if the builder would have seen him do it and filed theft charges. What could be worse than getting burned and then getting filed on???
Homicide charges LOL!!!
Maybe I haven't matured as much as I think I have if this is the first thing that raced through my mind.

See ya,
Kelly

"Garageworks could have placed himself in a very bad spot if the builder would have seen him do it and filed theft charges. What could be worse than getting burned and then getting filed on???"

Very true Kelly, but it was a sleepy Sunday afternoon and I just happened to be in the area finishing up another job so I thought I would swing by and see if the model house was open. It was, so we made haste to get it loaded up. Heck if the builder had shown up I really don't think he would have done anything and the cops in that particular city...are well good ole boys that I go way back with so they probably would have helped me load them up had they shown up on the scene. I know two wrongs don't make a right, but in this case we can call it a push. Hell I could have been a real prick and trashed the place, he still got my $4K flooring system without paying.
Crazy thing was this A-hole had the nerve to call me about 8 months later and asked me to do 4 of is homes that were going to be in the Spring Tour of Homes....I just laughed and said sure cash in advance for all 4 projects...he has not called me since.
I guess I have been lucky, only burned a couple of times. Most people I have dealings with are decent and good people.

Quote:
Posted by lbridges (My Page) on Tue, Jan 5, 10 at 20:12
So, I think I understand why a reputable builder would not want to furnish lien releases before getting paid - that reason being that they have to float more money (pay the sub and hope the homeowner is prompt), and that cut's into profit and/or raises prices (which cuts down on business).

What I don't understand is what protection the homeowner is afforded for the less than good builder when confronted with a lien put on the property by an unpaid sub.

I'd like to hear the answer to this question, also.

This is why you need to do a little homework on the builder before you choose them. There is always going to be a litte of a trust factor involved in the process between a pool builder and the home owner. Most pool builders use the same contractors over and over. If a reputable builder is not paying there subs then the sub will not work for them. I think a simple solution would be while the sub-contractor is present ask the lead man how long they have been doing work for the GC. I personally have been using the same subs for the past 12 years. Now I do have second and thrid companies that I use when we have so much going on that my regular guy can't get to it promptly. But even these companies not only know my reputation but I know theirs as well.

Normally when lien releases are requested by my customers. I will provide them as the subs are paid. Most of my subs turn in their invoices by Tuesday and they are paid on Friday. At that point they provide me with a lien release. And in turn I deliver the lien release to my customer. But in some cases where I mail the checks to my subs. I have to wait for them to get the check, and a few days for processing. At that point they will provide me with a lien release. Sometimes this process will take up to two weeks.

We as pool builders at the point of recieving payment from the customer could always stop the process of the build and wait for the lien release before moving on to the next phase of the project. But in most cases the customer wants the pool build now.

quote" So, I think I understand why a reputable builder would not want to furnish lien releases before getting paid - that reason being that they have to float more money (pay the sub and hope the homeowner is prompt), and that cut's into profit and/or raises prices (which cuts down on business). "quote

This does neither cut into profit or raise the sale price.

It cuts into a business owners' operating capital. Many feel that a business owners pockets are very deep, truth is they aren't. And equally as many have no idea how much it truly costs to operate a business.
Above that, he's already behind the 8 ball because he's committed to pay the invoice whether the buyer paid him or not. By continuing to move forward on the project will only incur more debt to the business owner for the services or supplies rendered. If the buyer doesn't pay I'm forced to incur legal costs to pursue my collection or my right to Lien the property and then pursue a Judgment against the Property Owner or the General Contractor.

quote" What I don't understand is what protection the homeowner is afforded for the less than good builder when confronted with a lien put on the property by an unpaid sub."quote

Unfortunately, none.
If the builder doesn't pay a subcontractor and he follows protocol i.e. Intent to Lien letter. He has the right to lien your property with a Mechanic's Lien. Even if you paid the builder for his services you'll still owe the sub's invoice in full. Now if he neglects to follow protocol the same laws which protect him from the builder will protect you from him.

Note to all readers,
Don't ever think for one millisecond that all contractors are either all good or all bad.
There are men within the general contracting industry that know exactly and precisely how the game works and will use that completely to their advantage to ripoff either a buyer or a service provider. They know that unless either one can prove beyond a reasonable doubt that the contractor was attempting to defraud him/them it's a civil and not criminal offense. A civil Summary Judgment is just a piece of paper, it doesn't mean he's forced to pay and he won't go to jail.
Ask the Goldman family how much O.J. paid on his Judgment awarded to their family, and if he hadn't been convicted of a criminal crime he'd still be enjoying 18 holes daily at the Beverly Hills country club and living in his same home.

See ya,
Kelly

Thanks Kelly.

quote "This does neither cut into profit or raise the sale price. It cuts into a business owners' operating capital."

Agree, what I was trying to say you either have to use money out of your pocket (that you then can't invest somewhere else), or you have to use a line of credit - either way hurts the PB and not the sub or the homeowner.

quote "Unfortunately, none"

And the bad part from an owner's perspective is that you have lien recourse while we're just screwed. It matters not if the PB just perfectly finished 5 pools, the very next homeowner could be the one that has a messed up yard when the IRS comes calling at the PB's facility for failure to pay quarterly taxes - and the unpaid subs put a mechanic's lien on the homeowner's property.

I think I understand most of the issue now.

Thanks again for your efforts (and the other PBs on here too!) to help us owners (and potential owners).

It should be simple like if I pay FTD to deliver a dozen roses to my sister, 3500 miles away, they call their local florist to deliver them. Then if FTD fails to pay them, the florist goes after FTD, not me. FTD is the GC.

The GC is the sub's customer, not me the pool buyer. I am buying the pool from the GC. I should be free of any liens as the buyer.

Glad I don't build them, just fix them.

Scott

quote" And the bad part from an owner's perspective is that you have lien recourse while we're just screwed. "quote

If you don't pay, I (the GC) have the right to not only Lien against your property but also have right to sue you to pursue a Judgment against you because you were in a direct Breach of Contract because there is an Agreement(contract) between us that was not fulfilled on your end.
If I neglect to pay a sub for services rendered, even though I was paid for his service's, he only has the right to pursue you for a Lien. Since there's no direct Agreement between you and him it is simply Implied that he's due compensation for his services, and since the GC didn't pay he can only Lien, he can't pursue a Judgment against the Property Owner. If he made me sign an Agreement for the service at a job of mine and I didn't pay, he could pursue me for a Judgment too.
In 15 years of Mechanical Contracting I never had a builder sign a Agreement. I now have several Subs, who thanks to scoundrels within the industry, make their Builders sign a contract on each individual job.

Over the past 15 years the only Sub who has always done this is my Granite man. This guy was burned by home builders so many times in the late 80's and early 90's that I was amazed that he was able to stay in the game.
This guy is awesome and didn't deserve it just as equally as the subs who worked for pool builders that didn't get paid too. My concrete guy got burned by a pool builder named Bruce, who was confused on a thread with a good Bruce here a few months back, for 55000 over the course of 7 months and 10 unpaid jobs. He confided in me that he had to leverage an equal amount against his business line of credit to just stay in the game. It took him over 150000 in new invoices to rebound back to zero. This, my internet friends, means that he did 200000+ of work for free because he didn't follow protocol on these unpaid invoices.

It Heartbreaking to everybody involved except the pool builder.

just-a-pb

quote" He did this with 20 to 30 contractors on many homes he was building. "quote

If these subs had gotten together they could have formed a class action suit and pursued criminal charges of Intent to Defraud against the home builder.
The only times I've ever seen builders go to jail is when the ripped off customers and/or the unpaid subs got together and pursued the GC as a Class Action (group) suit.

This year 3 pool builders were arrested and Indicted on these charges. When this goes to court and the Jury hears that each of this men had several companies prior to these that did the same thing, I'm hoping they'll be sentenced to the maximum duration of incarceration. Deliberately collecting money with no objective of completion for the buyer or compensation of the service/supplies providor of the project, IMO and the interpretation of the law, is a criminal not a civil offense.

See ya,
Kelly

I believe, but am not certain, they have extended mail fraud to include faxes and email.

Mail fraud is a federal crime and has teeth. Ask Al Capone.

Scott