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.