Question about Warranties and Jobs that are not fully payed?

Discussion in 'Heavy Equipment & Pavement' started by AWJ Services, May 14, 2011.

  1. AWJ Services

    AWJ Services LawnSite Platinum Member
    from Ga
    Messages: 4,281

    As the title says how would you handle a situation where you completed a job and there was a very minor price increase over your estimate when the job was completed and the customer has opted to not pay the difference. It is only a 4% increase in price and was clearly outlined in the estimate that there was a possibility of a price change. The job has a warranty.

    So would you refuse to warranty the job till final paymenet?
  2. ioilyouin

    ioilyouin LawnSite Senior Member
    Messages: 710

    You're pretty thorough, if you had it all spelled out and the customer agreed to the conditions, what's the problem? While the difference might not be worth the trouble to pursue legally, you can certainly withhold any guarantees. We occasionally get shorted on payments, they'll round down the payment to the nearest dollar, or get little dyslexic on the check. You just remember that the next time they call in, however I think you don't get a lot of repeat customers.
  3. bobcatexc

    bobcatexc LawnSite Senior Member
    from IL
    Messages: 276

    Was the price change outlined or explained in your bill the first time?

    I would send another bill with the new balance explaining the overage, sounds like you had unforseen expenses covered in your contract.

    Before you start threating not to warranty the work might just call and talk to them explaining the extra expenses.

    I'm just curious what was the reason for the extra expense, alot of times if its minor we just eat it, now if it was a change order due to the homeowner or something major thats different
  4. Blue Goose

    Blue Goose LawnSite Senior Member
    Messages: 448

    It's standard practice in our line of work (state, county, municipality, DOT, etc.) for there to be a 10% retention of the contract price for one year of liability (warranty as you call it) we have. It's their guarantee/leverage that all punch lists will be done.
    Last edited: May 14, 2011
  5. ksss

    ksss LawnSite Fanatic
    Messages: 7,157

    The difference with a rention from a public entity is you know you will get your money. Private work not so much.

    If there is no rention spelled out and the guy is pissed about the 4% increase chances are he will come up at least 4% short of full payment. You will also have the added cost of conducting warranty should something be needed for the reduced amount.

    For me it would come down to my relationship with this customer, if its either someone that have done work for or a contractor with a solid reputation that I do want to work for in the future. I would do the warranty work even if I was not yet paid in full without question. Otherwise I would be very carefully, maybe explain to the customer that to conduct warranty work the entire amount needs to be covered. Not saying I would not take care of it anyway but since money has gotten so tight, people seem to be less honest. Personally I am very tired of working for free in situations like this. Tough call.
  6. wanabe

    wanabe LawnSite Senior Member
    from So. IL
    Messages: 943

    Keep the warranty going and send a statment every month with 2% interest added to any remaining unpaid balance.
  7. Blue Goose

    Blue Goose LawnSite Senior Member
    Messages: 448

    Sadly, that's not the case, especially in these times.
  8. FLCthes4:11-12

    FLCthes4:11-12 LawnSite Senior Member
    Messages: 283

    No full payment no warranty. name another service or good you can short change and get a the warranty. But when I got to the extra part of the job where it was going to cost more I would have brought it to the attention of the customer I dont like surprises on pay day either way.
  9. AWJ Services

    AWJ Services LawnSite Platinum Member
    from Ga
    Messages: 4,281

    The change of cost was due to an increase to supply electrical and in also in design fees. I issued the estimate based off of average cost for these items.
    It is not prudent for me to have my electrician go bid on every job I bid on and since this is not new construction there is always unexpected costs and or issues that come up during work. I am very flexible with my clients but this one is not being very polite.LOL

    Legally each state may differ in there laws but I appreciate other buisness owners opinions and experiences on how they would handle this.
  10. IES

    IES LawnSite Senior Member
    Messages: 296

    We don't warranty any job not fully paid for. Part of cost is warranty and they are not paying for it so no warranty. I have had this come up twice. Once the people were perfectly fine with no warranty. The other had 3 extremely minor issues come up after completion which I told them we would fix if she paid the final bill. She threatened to call the local news station so I got her the number.
    Posted via Mobile Device

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