Practice Management Member Conversations

I have a client that seems to have lost interest in a project and also lost interest in paying. The client is a "big city" property management firm; the project is in a suburban town. My contact at this firm was the owner. At one point the project ran into a snag when the planning board attorney found a discrepancy between the title and survey, wording on an easement. It is clear it is the owner's responsibility to arrange rectification to this, but they haven't done it.  I spent almost a year trying to get the client to resolve this issue and going to planning board meetings to get extensions to give the client time to do this. The client stopped retuning my calls part way into this time. The town wanted this project to happen and the mayor even got involved in trying to get a response from the owner, but the owner didn't return call from the mayor's office either. The planning board eventually was no longer interested in extensions and denied the application. The minutes of planning board meetings indicate the project would have been approved where it not for this one discrepancy.

The owner owes me a couple thousand dollars on this project, mostly for reimbursable expenses. I have suspended work on the project. if I try to sue them for the money they owe, I believe they will just counter sue me as the project was denied. The only ones that will make any money in that case will be the lawyers and it would cost me more then they owe. Does anyone have any suggestions or should I just take the loss?

An additional issue; during the life of the project, I have also been paying the planning board's consultant fees and passing that on to the owner. As I am not getting paid, I haven't paid the last of those. I tried contacting the planning board to see if I can be removed as the middle man for that but now they are not retuning my calls. I don't know if I am responsible for those fess, what do you all think? Thanks

-------------------------------------------
Thomas Streicher AIA
Thomas Streicher, Architect
Monroe NY
-------------------------------------------

You might look into filing a mechanic's lien on the property - it is a simple action you can perform without an attorney.  The ability to actually enforce such a lien when filed by a design professional varies from state to state.  However, the mere presence of the lien filing can cloud the owner's ability to sell the property or obtain financing; it may therefore get some attention from the owner.

-------------------------------------------
Philip Kabza AIA
Partner and Dir Technical Services
SpecGuy
Charlotte NC
-------------------------------------------

If it's only a couple thousand dollars, can't you in NY file a 'small claims' action against the Client?

In California you can file a small claims action, as a business, up to $5000.00.  All we need to present in court is a signed contract and the invoices that the Client hasn't paid.  It doesn't matter to the Judge whether the project received approval.  It just a simple case of a contract for services and the service was provided to the Client.  The cost for filing and serving the Court Paper is reasonable ($100.00).

Collection on an awarded judgement is a separate issue.  When we have done this with none paying Client's; 50% of them have paid us, at the Court House, when we were awarded the judgement.

I know it cost money to chase down the none paying Clients, but for those of us that do work for Developers, we should know that the Developer Client is betting on the fact that we won't go after him.  


-------------------------------------------
Leslie Cooley AIA
Principal
Pierce & Cooley Architects
Irvine CA
-------------------------------------------






Original Message:
Sent: 10-22-2010 06:55
From: Philip Kabza
Subject: Not getting paid, so what else is new?

You might look into filing a mechanic's lien on the property - it is a simple action you can perform without an attorney.  The ability to actually enforce such a lien when filed by a design professional varies from state to state.  However, the mere presence of the lien filing can cloud the owner's ability to sell the property or obtain financing; it may therefore get some attention from the owner.

-------------------------------------------
Philip Kabza AIA
Partner and Dir Technical Services
SpecGuy
Charlotte NC
-------------------------------------------

-------------------------------------------
David Hauseman AIA
The Hauseman Group, Inc.
Atlanta GA
-------------------------------------------
This is always a problem.  I have State and Federal agencies that haev not paid.  Currently I have over $400,000 out to a Federal Government Agency with the IRS wanting employ taxes on money I have not collected.  The problem here is that you cannot sue a government agency.  You just have to wait and see if you can get your representative to put pressure on that agency.

Small claims is a good way, but it is a pain, depending on your local jurisdiction.  Try to use AIA contracts or at least reference them in your intial proposal stating that the attached copy of the AIA agreement will govern until a more formal agreement can be executed.

Most states note that if work has been done, than you have an agreement or a contract.  However, what you do not have that you get in the AIA documents are the legal fees and expenses.

I suggest that you always try to get at least 10% up front (50% for small jobs).  Especailly in this economy.  Also have the retainer come off the back end of the work.  They do not pay for the first month's invoice, you immediately stop work.  This is what we try to do, but we get sucked into always tryng to help a client and we end up coming up short.

Architects are not valued.  This has always been a problem.  Until the profession starts to sell the public and the building officals on need for architects as managers of the build environment sucha as health and safety; building codes; buildng systmes; and so on, the profession of architecture will continue to be an undervalued and a dying profession.  We hae allowed others to define architects and then alowed our leadership to chase esoteric or green issues.  We have forgotten the issues of value, health/safety, project/construction management and that of the architect as the real "conductor" of the orchestrated build environment.  Architects unfortunately, are a dying profession.
and



Original Message:
Sent: 10-25-2010 16:55
From: Leslie Cooley
Subject: Not getting paid, so what else is new?

If it's only a couple thousand dollars, can't you in NY file a 'small claims' action against the Client?

In California you can file a small claims action, as a business, up to $5000.00.  All we need to present in court is a signed contract and the invoices that the Client hasn't paid.  It doesn't matter to the Judge whether the project received approval.  It just a simple case of a contract for services and the service was provided to the Client.  The cost for filing and serving the Court Paper is reasonable ($100.00).

Collection on an awarded judgement is a separate issue.  When we have done this with none paying Client's; 50% of them have paid us, at the Court House, when we were awarded the judgement.

I know it cost money to chase down the none paying Clients, but for those of us that do work for Developers, we should know that the Developer Client is betting on the fact that we won't go after him.  


-------------------------------------------
Leslie Cooley AIA
Principal
Pierce & Cooley Architects
Irvine CA
-------------------------------------------

I once met an architect who did a lot of state and municipal work.  He shared with me his method for getting paid quickly. I believe he lived and worked in West Virginia and I'm not sure if the reason this worked is because of a State or local law, but apparently if a vendor offers the agency a discount - the agency must accept it. Apparently, this is because it is for the public good. Anyway, his invoice would always include a statement providing a modest discount for payment to be received by a certain date. You might look into this to see if it applies to your situation, but offer the entity a 1%, 5% or .025% discount if paid within 21 days and see what happens.

Steve
-------------------------------------------
Steven Burns FAIA
Director of Product Strategy and Innvoations
BQE Software Inc.
Torrance CA
-------------------------------------------







Original Message:
Sent: 10-26-2010 09:05
From: David Hauseman
Subject: Not getting paid, so what else is new?



-------------------------------------------
David Hauseman AIA
The Hauseman Group, Inc.
Atlanta GA
-------------------------------------------
This is always a problem.  I have State and Federal agencies that haev not paid.  Currently I have over $400,000 out to a Federal Government Agency with the IRS wanting employ taxes on money I have not collected.  The problem here is that you cannot sue a government agency.  You just have to wait and see if you can get your representative to put pressure on that agency.

Small claims is a good way, but it is a pain, depending on your local jurisdiction.  Try to use AIA contracts or at least reference them in your intial proposal stating that the attached copy of the AIA agreement will govern until a more formal agreement can be executed.

Most states note that if work has been done, than you have an agreement or a contract.  However, what you do not have that you get in the AIA documents are the legal fees and expenses.

I suggest that you always try to get at least 10% up front (50% for small jobs).  Especailly in this economy.  Also have the retainer come off the back end of the work.  They do not pay for the first month's invoice, you immediately stop work.  This is what we try to do, but we get sucked into always tryng to help a client and we end up coming up short.

Architects are not valued.  This has always been a problem.  Until the profession starts to sell the public and the building officals on need for architects as managers of the build environment sucha as health and safety; building codes; buildng systmes; and so on, the profession of architecture will continue to be an undervalued and a dying profession.  We hae allowed others to define architects and then alowed our leadership to chase esoteric or green issues.  We have forgotten the issues of value, health/safety, project/construction management and that of the architect as the real "conductor" of the orchestrated build environment.  Architects unfortunately, are a dying profession.
and

David,

I read your posting and feel the pain.  You are owed a lot of money, and though it may be reprehensible that the owner has not paid, it is sad to hear you say that we are undervalued and that the profession is dying.  I'm concerned that your feelings are becoming the norm.

What options and alternatives may there be for you?  I see there is a posting that does offer something......perhaps you write a letter to the owner and provide a discount should the account be made current?

At time like these, when we get into protection mode, our creativity goes down the tube.  It is happening time and time again with firms out there.

"Dang it, I'm owed this money...."

"Why don't the understand we're trying to help them....."

"Why don't we get any respect......"

Once we begin to restrict ourselves and assume a defensive posture, we cannot focus on the options and alternatives, we lose our creativity, the work loses its appeal, and we no longer are having any fun.  But you do have options and alternatives.

What can you do to change your feelings about where you are?

I created my practice to help firms such as yours move through these issues with awareness, appreciation, curiosity, and transformation.  We can choose to think differently.  We can get different results, but not at the same level of thinking.  (Thanks, Einstein!)

How can we help?

Best,
Steve Haber
Steve Haber Group

steve@steve-haber.com

-------------------------------------------
Steven Haber AIA
Principal
Steven E. Haber, AIA
Cincinnati OH
-------------------------------------------







Original Message:
Sent: 10-26-2010 09:05
From: David Hauseman
Subject: Not getting paid, so what else is new?



-------------------------------------------
David Hauseman AIA
The Hauseman Group, Inc.
Atlanta GA
-------------------------------------------
This is always a problem.  I have State and Federal agencies that haev not paid.  Currently I have over $400,000 out to a Federal Government Agency with the IRS wanting employ taxes on money I have not collected.  The problem here is that you cannot sue a government agency.  You just have to wait and see if you can get your representative to put pressure on that agency.

Small claims is a good way, but it is a pain, depending on your local jurisdiction.  Try to use AIA contracts or at least reference them in your intial proposal stating that the attached copy of the AIA agreement will govern until a more formal agreement can be executed.

Most states note that if work has been done, than you have an agreement or a contract.  However, what you do not have that you get in the AIA documents are the legal fees and expenses.

I suggest that you always try to get at least 10% up front (50% for small jobs).  Especailly in this economy.  Also have the retainer come off the back end of the work.  They do not pay for the first month's invoice, you immediately stop work.  This is what we try to do, but we get sucked into always tryng to help a client and we end up coming up short.

Architects are not valued.  This has always been a problem.  Until the profession starts to sell the public and the building officals on need for architects as managers of the build environment sucha as health and safety; building codes; buildng systmes; and so on, the profession of architecture will continue to be an undervalued and a dying profession.  We hae allowed others to define architects and then alowed our leadership to chase esoteric or green issues.  We have forgotten the issues of value, health/safety, project/construction management and that of the architect as the real "conductor" of the orchestrated build environment.  Architects unfortunately, are a dying profession.
and

Steven,

That is some great advice.  Wish you'd share some of this on my new blog (see front page).

Thanks!

Tara
-------------------------------------------
Tara Imani AIA
Principal
Tara Imani Designs, LLC
Houston TX
-------------------------------------------






Original Message:
Sent: 10-27-2010 17:08
From: Steven Haber
Subject: Not getting paid, so what else is new?

David,

I read your posting and feel the pain.  You are owed a lot of money, and though it may be reprehensible that the owner has not paid, it is sad to hear you say that we are undervalued and that the profession is dying.  I'm concerned that your feelings are becoming the norm.

What options and alternatives may there be for you?  I see there is a posting that does offer something......perhaps you write a letter to the owner and provide a discount should the account be made current?

At time like these, when we get into protection mode, our creativity goes down the tube.  It is happening time and time again with firms out there.

"Dang it, I'm owed this money...."

"Why don't the understand we're trying to help them....."

"Why don't we get any respect......"

Once we begin to restrict ourselves and assume a defensive posture, we cannot focus on the options and alternatives, we lose our creativity, the work loses its appeal, and we no longer are having any fun.  But you do have options and alternatives.

What can you do to change your feelings about where you are?

I created my practice to help firms such as yours move through these issues with awareness, appreciation, curiosity, and transformation.  We can choose to think differently.  We can get different results, but not at the same level of thinking.  (Thanks, Einstein!)

How can we help?

Best,
Steve Haber
Steve Haber Group

steve@steve-haber.com

-------------------------------------------
Steven Haber AIA
Principal
Steven E. Haber, AIA
Cincinnati OH
-------------------------------------------







Original Message:
Sent: 10-26-2010 09:05
From: David Hauseman
Subject: Not getting paid, so what else is new?



-------------------------------------------
David Hauseman AIA
The Hauseman Group, Inc.
Atlanta GA
-------------------------------------------
This is always a problem.  I have State and Federal agencies that haev not paid.  Currently I have over $400,000 out to a Federal Government Agency with the IRS wanting employ taxes on money I have not collected.  The problem here is that you cannot sue a government agency.  You just have to wait and see if you can get your representative to put pressure on that agency.

Small claims is a good way, but it is a pain, depending on your local jurisdiction.  Try to use AIA contracts or at least reference them in your intial proposal stating that the attached copy of the AIA agreement will govern until a more formal agreement can be executed.

Most states note that if work has been done, than you have an agreement or a contract.  However, what you do not have that you get in the AIA documents are the legal fees and expenses.

I suggest that you always try to get at least 10% up front (50% for small jobs).  Especailly in this economy.  Also have the retainer come off the back end of the work.  They do not pay for the first month's invoice, you immediately stop work.  This is what we try to do, but we get sucked into always tryng to help a client and we end up coming up short.

Architects are not valued.  This has always been a problem.  Until the profession starts to sell the public and the building officals on need for architects as managers of the build environment sucha as health and safety; building codes; buildng systmes; and so on, the profession of architecture will continue to be an undervalued and a dying profession.  We hae allowed others to define architects and then alowed our leadership to chase esoteric or green issues.  We have forgotten the issues of value, health/safety, project/construction management and that of the architect as the real "conductor" of the orchestrated build environment.  Architects unfortunately, are a dying profession.
and