How to Go About Submiting a Bill to Settlement

[Nick Ostrowski]

I have a client that appears to be avoiding me and making payment. She was very communicative up the inspection and immediately following the inspection right up to the point where she received the report the next day. Now, I can't get an e-mail response or get her to return a phone call.

In case you're wondering why I did not get paid, she showed up for the inspection but said she had to go back home for a work call but would be back. She never came back, I completed the inspection, and spoke with her afterwards. She apologized, said work got crazy, etc. Fine. I e-mail the contract to her along with my address where she can mail a check. I get the signed contract and she says she will get payment out ASAP. That was two weeks ago and while I normally wouldn't think I'm being screwed, she has not responded to one of my messages since and still no check.

It is new construction and I don't know for sure where they do their settlement but I may be able to drop a bill for the inspection for the title company at the builder's office.

I've never had to do this before but I just wanted to be prepared in case she continues avoiding me.

- how likely is a builder (Toll Bros) to give me the info I need to submit a bill?
- how should a bill like this be prepared/worded and what type of info should be included as part of the bill?

Like I said, this is totally new to me as only two people have really tried to screw me in 14 years of inspecting. And sometimes stuff happens and people forget their checkbook and I tell them to just mail me the check. I give people the benefit of the doubt as being honest and expect they will pay.

Any feedback on how to submit a bill for their settlement would be appreciated from those with experience.

[Jim Luttrall]

I feel for you, several like that have firmed up the the "no Check, no report" motto for me. Same for the signed agreement.
Is there a real estate agent involved? Sometimes they can be quite helpful getting things to the title company.
If no agent, I would simply call the salesman and ask what title company they use and then hand deliver the bill and asking them to include it at closing if possible. I would not bring up the stiffing you part of the story.

I used to do payment at closing all the time years ago but stopped right after the mortgage meltdown. I still have a few thousand out over that stupid tax!

[ROBERT YOUNG]

I,m with Jim. In God we trust, all others pay cash.

Never know. She could have been called away or had to deal with an emergency.
Hope it works out for you.

[Claude Lawrenson]

The other option....a bit more drastic, but certainly effective is file a construction lien against the house.

I only encourage it until as a last ditch effort.

Perhaps the suggestion alone to the client, may encourage a more immediate response.

[Gunnar Alquist]

Nick,

I'm with Jim. Here in CA, the best bet is to contact the agent, get the escrow information (title company, escrow officer, phone number and/or email address, and escrow number) and have it added to the payments that are made as a part of closing the transaction. I assume there is a similar option in PA.

I understand your conundrum. I used to be the good guy too and would send out the reports as soon as I had them done, whether or not I had received payment. I understand that they need the report as soon as possible so they can have time to review and order any additional inspections necessary. This worked for a lot of years, but I started getting stiffed a few years ago.

I finally had to get hard-nosed about it. If I don't get payment or a signed contract at the inspection, I send an email out as soon as I get back to the office letting them know that they can have the report as soon as I get payment. For me, credit card is an option (I prefer not, because I get a fairly hefty charge, but it's better than chasing people around).

I know some inspectors who demand payment before they even step onto the property. I think that is a bit much, but it seems to work for them.

I wrote-off the lost inspection fees and took it as a learning experience. I hope you get the money.

[Jerry Peck]

The other option....a bit more drastic, but certainly effective is file a construction lien against the house.

I only encourage it until as a last ditch effort.

Perhaps the suggestion alone to the client, may encourage a more immediate response.

Not sure of other states, but in Florida a home inspector does not fall under the lien law as they are not doing anything which is 'permanent' for which a lien can be attached to the property.

[Claude Lawrenson]

Thanks Jerry - good point of clarification, that variations can depend upon geographical location. As I said earlier it would be my last resort to collect.

[Garry Sorrells]

Another little issue is that the contract was with the buyer and not the owner of the property. It is a breach of contract and possibly fraud, but that is a different catfish to skin

You might make waves with the lender and create some financing underwriting issues that might get the buyer's attention. Today lenders are making all Ts are crossed and Is dotted. Little issues become potential large problems for the borrower. Muddy the waters and a check may float to the surface.

[Nick Ostrowski]

Thanks for the info guys. It is still early and I'm hoping the buyer will just respond, say she was away, or whatever and resolve this. If not, the house is only about 10 minutes from me and I know they will be moving in. If I have to, I'll just let them settle on the house, move in, and I'll go knock on their door.

[ROBERT YOUNG]

Claude, a collection firm would be a last result.

Builders lien is not applicable in this case.
I missed a lean by a week. Still have to contact the lawyer to see if everything was settled. Happened several years back.

[Jerry Peck]

Another little issue is that the contract was with the buyer and not the owner of the property. It is a breach of contract and possibly fraud, but that is a different catfish to skin

You might make waves with the lender and create some financing underwriting issues that might get the buyer's attention. Today lenders are making all Ts are crossed and Is dotted. Little issues become potential large problems for the borrower. Muddy the waters and a check may float to the surface.

Yep - that could be a solution. I have heard of others who have done that - file a small claims court case, they most likely will not attend, you get a default judgement in your favor, take that to a collection agency (you add their take to the total as a cost of collection), the mortgage company at closing says 'Whoa - what is this outstanding judgement against you? You need to clear that up before continuing. And, by the way, we are going to look deeper into your finances to find out who else you did not pay, and if you might not pay us.'

Waiting until they move in loses all your leverage, then it is just 'bill collecting' and you need to be careful about your efforts in that, you don't want to do that wrong and get consumer protection on their side.

Small claims, pronto, automatic no-show judgement, call collection agency ... get it on record quickly.

[ROBERT YOUNG]

Yep - that could be a solution. I have heard of others who have done that - file a small claims court case, they most likely will not attend, you get a default judgement in your favor, take that to a collection agency (you add their take to the total as a cost of collection), the mortgage company at closing says 'Whoa - what is this outstanding judgement against you? You need to clear that up before continuing. And, by the way, we are going to look deeper into your finances to find out who else you did not pay, and if you might not pay us.'

Waiting until they move in loses all your leverage, then it is just 'bill collecting' and you need to be careful about your efforts in that, you don't want to do that wrong and get consumer protection on their side.

"Small claims, pronto, automatic no-show judgement", call collection agency ... get it on record quickly.

Not so fast...:hand:

Yes, that is one collections avenue.

IMO though, tying up the courts for such a small fee exacerbates the system, but that what it's there for, I guess...

Having been expert witness for two plaintiffs, and defendant for one, after the plaintiffs launching false and APPLYING intimidations, the accusations did not sway the courts.

That being said. In my jurisdiction the system can be abused by ignorance, willing or not. to take to take advantage of the system.
It can be time consuming...:frusty:

[Nick Ostrowski]

Well I finally heard from the buyer today. She said life events got in the way and there was miscommunication on her end about who was paying me. Sounds like all will be resolved and she will pay me for this inspection as well as the final inspection later this month with one check. I'll just make sure payment in full for both inspections is received prior to starting the next inspection.

Onward and upward.

[Jerry Peck]

Good to hear there is a probable good ending coming up.

[Bruce Carr]

No contract= no report
No payment= no report
Very few exceptions for people I know personally & long term repeat clients.

If they are 'in a rush' to get the report, they will find a way to sign your contract and pay you; & any decent realtor should back you up on that.

[J Cornish]

That's a good example why our policy is to be paid up front.

However; in 24 yrs, we've only had 2 bad checks. One, a crazy person. She bounced everyone's checks. Really, no re-course. The second one, as your complaint; bounced the check, and avoided us. In Michigan, when someone bounces a check, we were able to sue for 2X's the written check. We filed a small claim and won. We won, but never recovered a dime. They disappeared...

[Jim Hintz]

I'm with Bruce Carr on this one - and, payment is due at time of inspection - Cash Check or Money Order Only - No Credit or Debit - never have in 15+ years, not about to start now.

- - - Updated - - -

I'm with Bruce Carr on this one - and, payment is due at time of inspection - Cash Check or Money Order Only - No Credit or Debit - never have in 15+ years, not about to start now.

[Michael Bronner]

I've resorted to taking CCs. Hate the fees but my collections have fallen to almost nothing. I rarely have to bill anyone anymore. Ditto with some of the other comments. No money, no signed agreement, NO report. You just can't be the nice guy anymore as someone will eventually screw you.