Scary Stories of Turnkey Construction

There are a certain percentage of folks who live in a dream world where hiring a Building Contractor to “turnkey” their pole building project makes life all good and happy. They hire a contractor to provide the materials, as well as the labor.

Back in my early days of owning M & W Building Supply, I provided the materials to a builder named Ken, for one of his customers. As required by Oregon Law, I sent out the required Intent to Lien notices to the property owner.

Some states require a “Notice to Owner” or “Intent to Lien” form to be sent by material suppliers to property owners. This notice is to advise property owners of who is providing materials to be used for improvements on their property. Should a notice be received, it is not a lien. The notice will include information which should be read and understood. To learn more about lien laws and notices, property owners should discuss with their contractor (if one has been hired), the material supplier, any appropriate state agency (usually specified on the notice), the firm who sent the notice, and the improvement lender or an attorney.

Now in the case of Ken, he didn’t pay his bill to us, so we had to file a lien on the property where the barn was built, in order to be paid. His customer had not paid attention to the information received in the mail from us, and sadly ended up paying for the materials twice!

According to a recent article by Craig Webb in Pro Sales Magazine, (https://www.prosalesmagazine.com/news/industry-trends/why-are-payments-slowing-blame-the-worst-customers_o?utm_source=newsletter&utm_content=jump&utm_medium=email&utm_campaign=PSBU021815&day=2015-02-18) in 2014 25.9% of contractors who were at least one day late paying their bills for materials fell into the high, very high, or severe risk categories as far as ever paying their bills!

25.9% is over one-in-four!!

As a future building owner, are you willing to play Russian roulette with a four chambered gun which has one live round?

When hiring a turnkey contractor who is providing materials also – you are taking the risk of the builder not paying – and you being stuck with the tab!

How to avoid this situation?

The easiest way is to buy the materials yourself, and pay only for the labor to install. This assures you of two things – the contractor didn’t mark up the cost of the materials and the material bills got paid for.

Yes, this means writing a few more checks. If it keeps you from having to pay twice, isn’t it well worth it?

P.S. And don’t, under any circumstance, give a contractor carte blanche to just order whatever he or she needs at your local lumber yard and charge it to you. If you do, anticipate the bills to be higher than expected and to be assisting to provision the builder’s tool chest or own inventory.

Learn more on protecting yourself from shady contractors: https://www.hansenpolebuildings.com/blog/2013/07/contractor-6/

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