Contract Clauses to Watch Out For in Construction Contracts

3. Payment terms (continued from page four):

Never be afraid to call the general contractor and ask him when you can expect payment. If you wait too long to ask about a late payment then you might lose out.

Unfortunately there are general contractors (as well as subcontractors) out there that won't think twice about stiffing you. If he can get away with it, he will. [That's not to say that there aren't excellent general contractors out there, there are and they are wonderful to work with.]

There are avenues to follow if this does happen such as contacting the owner to determine if payment has been made to the general contractor or not. If yes, find out when. If no, find out why not and when payment will be made to the general.

If the general has indeed been paid (but has not paid you), then you need to start hounding him immediately. If he won't pay you then file a complaint with the Contractors State License Board, with the G.C.'s license bond company and file a complaint with his payment bond company if he has a payment bond.

The State License Board can give you the name of his license bond. If there is a payment bond, the owner of the project can give you the name and contact info of that bond company.

If you do not stay on top of this, you could end up not getting the money that is owed to you. Once you know for a fact that payment is being withheld by the general contractor you can file a 'stop funds notice'.

A 'Stop Funds Notice' is designed to freeze all money on the project until the problem is resolved.

These are serious steps but sometimes this is what it takes to get the payments that are owed to you. Please contact an attorney to help you through this.

Construction Contracts Continued on page 6