Holding back certs for payment

[RISElectrical]

Hi all, new member of the arms so hi and it's good to be here.

Now I was wondering how many of ou withhold certs until payment is received? Most of my work is subcontract to a large national company so my payment terms from them are 60 days, been this way for years and years and no problems, also no problems with certs, they get them right away.

However started doing domestic to fill the gaps and been doing EICRs for landlords etc, now I prefer payment on completion of job and before I leave is nice but it's not often landlords do this. I put them all on 14 days payment terms but some are late, I have started to hold back certs now until full payment is received. Do others do the same? Also this is working ok for EICR but would you do the same for MWC and EICs?

Thanks all

 

[D Skelton]

In my opinion, technically, that's wrong. The customer is entitled to withold payment until the job is completed, that includes certification. The way I do it is issue large customers with foolproof T and C's including late payment clauses and also a clause that states all fittings remain my property until payment is recieved in full.

That way, if they don't pay, you might not get your money straight away but you are at least able to inconvenience them substantially whilst in the process of taking them to court.

 

[RISElectrical]

Large customers have T&Cs etc, I'm not talking about with my large customers, for contracts above 5k we have staged monthly interim payments etc. again different terms for 20k and upwards. I'm talking about getting a phone call from a landlord for a £160 eicr and then chancing getting paid. Payment upon completion isn't always possible and I don't fancy the hassle of chasing a few £160 payments. Therefore was wondering if others held back certs.

I haven't ever held back a minor works or EIC, they usually get these upon handover of the job as I have to cert the works.

 

[Darkwood]

Id be more inclined to give 28days for Landlords, it allows them to shift payments into following month, if you issue invoice on 10th he may find he wants to pay on the next month to balance his in and outgoing, private domestic customers 14days is fine they aint usually trying to balance books, and with-hold certs by all means but if they ask for them or refuse to pay until they have them then they are in the right as mentioned already.

 

[D Skelton]

Hmm, I see what you're getting at now. Still, I would have thought some customers might be reluctant to hand over money untill they actually have the report in their hands. I certainly wouldn't be handing over cash until I had the report if I were a customer. Like darkwood said, extending your payment period is probably a good idea but I guess you can't always protect yourself from someone who wants to rob you. That said, 99.9999% of people won't and will pay up without reminder.

I have been lucky enough to never have had anyone in this line of work get funny about paying up but should that moment ever come and it was for a small amout of money, I would just calmly explain to them, without any witnesses around of course, that non payment would cost them far much more in the long run than just paying me what I'm owed.

 

[Darkwood]

I know alot of bikers and during work it pops into conversations here and there... ive never had any payment problems fingers crossed although some have tried to be smart and but as i say a disguised hint here and there is usually good. I often chat to customers, so saying im on a biking rally next week with 200 hefty bikers and explaining theres never any trouble and its a good day out are all my hidden hints.
I put it to you if you got a decorator in and he says hes a member of the local bikers club would you get funny with payments

 

[D Skelton]

Or a member of the local BJJ club?

 

[Amp David]

I issue any certification only when paid. Its in my terms.

When you sell a car you wouldn't give the buyer the registration document before there payment had cleared.

Also state it on invoice too. Never had any issues yet

 

[Octopus]

The only time I did it, I discussed it with the client and he said "good man"

 

[Darkwood]

Or a member of the local BJJ club?

BJJ - too :donatello:much discipline and most wont have a clue what it is, now bikers have a stigma attached (unfairly these days) and usually just puts a deep down 'dont mess' feeling but as ive said its not like that anymore although i can point out a few MCC that still rule the old way and even i tiptoe around them buggers :disguise:

 

[D Skelton]

I issue any certification only when paid. Its in my terms.

When you sell a car you wouldn't give the buyer the registration document before there payment had cleared.

Also state it on invoice too. Never had any issues yet

Not that I'm saying you're wrong, but a difficult customer with enough knowledge could easily and lawfully dispute paying you at all until certification is recieved. Technically, your terms are unlawful under the Unfair Contract Terms act 1977.

It's a tough one as customers have always got us by the balls so to speak, and the law unfortunately is on their side!

If I went into a shop and took an item without paying, it's theft, however if we provide parts and a service to a customer in their home and they choose not to pay, it's not theft, it's a civil dispute. Absolute tosh if you ask me but the law is the law.

 

[D Skelton]

BJJ - too :donatello:much discipline and most wont have a clue what it is, now bikers have a stigma attached (unfairly these days) and usually just puts a deep down 'dont mess' feeling but as ive said its not like that anymore although i can point out a few MCC that still rule the old way and even i tiptoe around them buggers :disguise:

See when I think of big hairy bikers, I just think of good cooking! hahaha

 

[Guest123]

Those of you that use certificates to hold a customer to 'ransom' are walking a slippery slope as it is viewed as a big no no.

None of the schemes will back you in this method of extorting the money out of a non paying customer.

Should the debt go 'legal', the very first thing you will be told to do is to hand over the cert without delay to the customer as technically you have not completed the work so the customer does not have to pay you.

Only then will they even consider trying to obtain payment on your behalf.

 

[D80]

Is it possible/legal (if using software for certs) to watermark a cert before payment (something like PROVISIONAL or the like)? Then upon full payment issue a full cert.

 

[Guitarist]

Personally, I don't see how you are extorting money from a customer if it is actually a payment due for work done, Lenny. Most accountants won't "enter" a clients accounts online until they have received payment, so I can't see why we can't "hand over" a certificate on payment. My Dad recently had a wood burner installed and the guy told him that no certificates are issued until payments are received in full. I think that as long as you make it clear from the start of a job then it seems like good business practice to me.

 

[Octopus]

Theres absolutely NOTHING wrong with stating on your estimates that certificates will be provided on receipt of payment, as long as you do this prior to doing the work.

 

[Guitarist]

I forgot to mention when you sell your house... You don't receive payment until the estate agent and solicitor has taken their cut, then you receive whatever the balance is. They don't give it all to you and then bill you.

 

[Guest123]

Each to his own.

You'll end up in more bother than when you started though.

 

[Guest123]

Personally, I don't see how you are extorting money from a customer if it is actually a payment due for work done, Lenny.QUOTE]


But...the work isn't done until a cert has been issued.

Domestically you will probably get away with it, on the larger comm/ind jobs, the main contractor wont release payment until you have 100% finished your installation i.e, handed over ALL the paperwork in the O&M manual including all the test certificates.

 

[Guitarist]

Lenny, I fully understand how large commercial and Industrial, including operating manuals etc. is a completely different ballgame. However, the OP was about payment in the domestic sector and I think it is wholly fair and sensible (after completing a job) to ask for payment as one hands over final test certificates if one has stipulated that these are the payment terms. As I said in my previous posts, most other professions these days ask for payment in full at the same time as documents are issued. I worked for large companies for over 20 years and it is completely different to trying to make ends meet as a sole trader.

 

[Guest123]

Like I said, each to his own.

In response to the OP, not something I have done, or would do.

 

[RISElectrical]

I did state in my OP that for clients in commercial and industrial I have different terms, different terms per client, per cost bracket etc etc. All my experiencence is in commercial and true you can't, and I don't withhold from them. All manuals, certs etc are handed over upon completion. I was talking about domestic where its easier to withhold a cert for 30 days than it is to chase £100. domestic is something I have a mass of experience in.

I would, if I went for the idea have it clearly stated on all estimates and invoices.

 

[UNG]

In my opinion, technically, that's wrong. The customer is entitled to withold payment until the job is completed, that includes certification. The way I do it is issue large customers with foolproof T and C's including late payment clauses and also a clause that states all fittings remain my property until payment is recieved in full.

That way, if they don't pay, you might not get your money straight away but you are at least able to inconvenience them substantially whilst in the process of taking them to court.

Nothing in my opinion is foolproof and while all fittings may remain your property entering a site to recover them may be considered trespass

 

[baldelectrician]

I do a fair bit of domestic work and always tell the client that I don't discuss inspection and testing until payment is recieved.

Had one last week say "I'll pay by cheque", I told him that I will be back to do the EICR in 2 weeks once the cheque is clear. I offered him the option to pay via card but he refused- he was a builder.
I walked away from this one- the first one I have had problems like this in 3 years

I used to issue a cert watermarked one with 'copy-not valid', I also don't sign the cert and fill the name box with "NOT SIGNED" to make sure
This way I am issuing a cert as required by law- it doesn't require you to sign it, only issue a cert. This was too much hassle.

For ALL EICR's (unless it's a regular client) I tell the client upon arrival that over 60% fail and tell them it's company policy to take payment upon arrival. I give them the option of continuing with payment or leaving without charge.

 

[mickys86]

I do a fair bit of domestic work and always tell the client that I don't discuss inspection and testing until payment is recieved.

Had one last week say "I'll pay by cheque", I told him that I will be back to do the EICR in 2 weeks once the cheque is clear. I offered him the option to pay via card but he refused- he was a builder.
I walked away from this one- the first one I have had problems like this in 3 years

I used to issue a cert watermarked one with 'copy-not valid', I also don't sign the cert and fill the name box with "NOT SIGNED" to make sure
This way I am issuing a cert as required by law- it doesn't require you to sign it, only issue a cert. This was too much hassle.

For ALL EICR's (unless it's a regular client) I tell the client upon arrival that over 60% fail and tell them it's company policy to take payment upon arrival. I give them the option of continuing with payment or leaving without charge.

So in effect - you charge before you do any work??

 

[baldelectrician]

Only for works that involve inspection of works carried out by others for building control approval

I charge the agreed amount upon arrival and explain the situation- I almost always make this clear on the phone (unless I am driving and it's a really bad line) when the works are arranged so the client is aware at the outset.

The customer has nothing to lose- if they don't agree I walk and thank them for their time -without charge

I started this when I had problems getting paid from a couple of one off clients who were miffed their sheet installation failed and didn't see why they had to pay for a failed inspection.

I don't tell anything on an inspection until the balance is paid.

 

[imago]

I'm a simple soul, if I don't like the 'feel' of a job or customer I don't do the work. On the odd occaision payment isn't forthcoming when it's due I use whatever means I feel appropriate in the circumstances to recover what's owed.

Watertight T&Cs are all very well, but they only tend to work with people who were going to pay anyway.

To answer the original question, I don't withold certs or any other paperwork. I do exactly what I've been engaged to do and prvide everything which is required to fulfill that obligation. Then the customer pays me what they have agreed. Sometimes it takes longer than expected.

 

[D Skelton]

Nothing in my opinion is foolproof and while all fittings may remain your property entering a site to recover them may be considered trespass

Trespass is a civil dispute, not a criminal offence, to which a perfectly reasonable counter claim in any court would be that I entered the property to reclaim goods that I legally own. No court would ever rule in favour of the claimant and his accusation of trespass when the far more serious claim of obtaining property and/or services by deception has to be answered first.

If you look around, there's plenty of case law to back up people trespassing in order to reclaim goods owned. As long as no criminal offence is committed in gaining entry to the property, you'd be perfectly fine.

 

[D Skelton]

I did state in my OP that for clients in commercial and industrial I have different terms, different terms per client, per cost bracket etc etc. All my experiencence is in commercial and true you can't, and I don't withhold from them. All manuals, certs etc are handed over upon completion. I was talking about domestic where its easier to withhold a cert for 30 days than it is to chase £100. domestic is something I have a mass of experience in.

I would, if I went for the idea have it clearly stated on all estimates and invoices.

What you would do is provide more opportunity for a customer not to pay you. If I was a customer and had an electrician carry out an EICR on one of my properties, I wouldn't be handing over any money until I had the report in my hand. The law would fully support anyone withholding payment until the job is 100% complete, which includes issue of the report. Also, any terms and conditions you write that state otherwise, regardless of whether the customer has signed and agreed to them, would be deemed entirely unlawful.

If an electrician told me no report would be issued until payment is received in full I would be telling them where to go!

A customer, no matter how big or small, is perfectly entitled to withhold payment until you stop withholding the cert/report.

 

[RISElectrical]

Maybe considering the advise I may look into watermarking reports as draft or something, however with the hassle and cost of printing everything twice I might be best just issuing the reports and chancing not being paid.

Still finding my feet domestic wise with the customers, business to business is so much easier!

Thanks for all the replies

 

[imago]

Worth bearing in mind that as T&Cs form part of a contract, any unlawful statement or terms renders the whole contract unlawful and therefore void.

Contract law is an absolute minefield if you aren't up to speed with what is or isn't acceptable. Keep it as simple as possible and you can't go wrong. ie, "I will do this, this and this. You will pay me this amount by that date/upon completion." As soon as you start adding things in like penalty clauses, ownership statements, transfer of ownership terms, conditions that must be satisfied prior to other actions taking place etc etc you need to have it drawn up by a suitably qaulified and experienced solicitor. If you don't when one is engaged they will start work tearing it apart and ripping you a new poo shute in the process.

There is much discussion on this forum about partly qualified and inexperienced electricians taking on jobs which are beyond them. Yet some sparks who have absolutely no training or experience feel that they can draw up legally binding contracts and agreements. You can't have it both ways, either amateur hour is OK, or you only engage suitably qualified professionals to do the job right.

 

[D Skelton]

Maybe considering the advise I may look into watermarking reports as draft or something, however with the hassle and cost of printing everything twice I might be best just issuing the reports and chancing not being paid.

Still finding my feet domestic wise with the customers, business to business is so much easier!

Thanks for all the replies

Trust me, you're more likely to get screwed over money wise by another business than a domestic customer. I wouldn't even waste any energy worrying about it.

Also, believe me, it is a hell of a lot easier to get money owed to you from someone with a permanent address and a couple of cars on the drive instead of a business with nothing but a dodgy PO box as their registered address!

 

[RISElectrical]

The holding back of the certs was my only question as I wasn't sure on this. My terms and conditions that we have in place have been drawn up by a solicitor. Was just askinclear some feedback about the addition of the report clause for domestic clients.

Reading it's probably not the best idea and I'm probably best just using the same terms as we give to commercial clients

 

[imago]

The only difference I have between business/commercial and domestic customers are the payment terms. Domestic it's 30% the day I start work and the rest on completion. Business and commercial it's staged payments (first fix, second fix, test & cert) for new installs. For commercial repairs or testing it's still staged but that is on a case by case. For both it's agreed up front.

As I said earlier though, if it doesn't 'feel' right I politely decline the work. Sure that's probably cost me a few jobs here and there, but it's definately saved me a fair amount of time and hassle.

 

[D Skelton]

You'll do just fine my friend Welcome to the wonderful world of of house bashing!

 

[Guitarist]

It's all fine and dandy for people with a steady income, sick pay and a pension to tell you what the law states (I know, I've been there). When it is you against the world though, and someone gives you grief over payment with your mortgage due and kids to feed, then a simple thing like "I've done the work, you pay me and I give you a certificate" can make a world of difference.

 

[Goody]

Someone said on this forum that he would give a customer a certificate with a watermark that says, “Not a valid certificate” and give the proper one only if the full payment was made. Sensible approach!

 

[baldelectrician]

Maybe considering the advise I may look into watermarking reports as draft or something, however with the hassle and cost of printing everything twice I might be best just issuing the reports and chancing not being paid.

Still finding my feet domestic wise with the customers, business to business is so much easier!

Thanks for all the replies

Why print- I email all mine as a pdf (with a scanned signature).then it's their ink and no post