Construction Attorney Guidance to Avoid Payment Problems

A Roundtable Discussion on Preventative Protection for the Construction Industry

In the construction industry, legal challenges and payment disputes are common. However, with a little bit of proactive thinking you can get ahead of payment problems before they arise.

We’re excited to offer this panel of construction attorneys, who will share expertise from years of personal experience helping contractors resolve payment issues. 

Learn about:

• Why payment problems are such an issue in the construction industry
• Proactive advice from attorneys on how to avoid payment problems
• Lawyers share their real world experiences preventing construction payment issues

Transcript

Seth Bloom (00:09):
All right. So it’s a minute after one o’clock so we’re going to go ahead and get started. Um, my name is Seth bloom. I’m senior director of attorney services here at Levelset, uh, today’s webinar. We have two lawyers with us, so we’re really excited about that is construction attorney guidance, uh, avoiding payment problems. So, um, welcome everyone. I can’t remember. All right, here we go. And so I wanted to introduce today’s panelists, um, Ben house, he’s a partner at house parotid house, and they are in the greater Houston area. Uh, Andrew Weidmann, he’s a founding manager partner at Wyman legal solutions at Boca Raton, and does work all over the south Florida area. And, uh, some of the topics today that we’re going to cover is why getting paid is such an issue in the construction industry. Uh, proactive steps, uh, contractors can take to avoid payment problems, success stories of construction companies that have kept non-payment issues at bay. So those are some of the things we’re going to tackle today, or we’re going to talk about them. Um, so I can start with Ben, but why is a, is getting paid such an issue?

Ben House (02:07):
Oh, well, every possible way a contract can go wrong or a fight can happen. Your leverage is payment. Uh, your let, if, if somebody’s fussing at you for not doing something you were supposed to do, their leverage is payment. If a sub has failed you, your leverage is payment. If you’re a homeowner, your leverage, his payment, and then, uh, all the way up the chain of contract, you know, if payment is interrupted somewhere up there from either odor general contractor or anywhere on down, and if it’s up high, that’s the dangerous one. Then, uh, a lot of contractors default to, well, regardless of what their contract says, I’m not going to get paid. My guy’s not going to get paid, but I’ve had, I’ve had been lucky, had many clients that say, I’m going to, I’m going to keep paying my guys no matter what, and we’re going to get this dispute figure. I, I would say that’s probably the exception more than the rule. So really all roads lead to not getting paid. So that’s why you need to exert some pressure backwards,

Seth Bloom (03:11):
What our company is about, getting our customers, getting our contractors pay. So, Andy, do you have anything to add to that?

Andrew Wyman (03:18):
Ben’s right. No, Ben’s right. I mean, you know, especially when you’re running a business, if you’re a small business, cashflow is just so important. And if, you know, it’s being able to predictably receive money on the jobs at the point where you’re expecting to get them, that’s going to keep your business alive. It’s going to, it’s going to allow you to have a little bit of wiggle room on those jobs that may not be, you know, moving along, uh, as, as you want. So, you know, uh, it’s it’s and, and again, as Ben pointed out, that’s the pressure point payment, you know, owners, they want to hold as much money to the end of the project, or as close to the end of the project as they can contract with, want to get that money. Front-loaded where they can, you know, there’s a sort of a natural, uh, you know, uh, disagreement there that you’ve really got to make sure you work out at the beginning of a project. You know, what, how the progress payments are going to be made when they’re going to be done and, you know, make it predictable. So everyone understands at the beginning exactly how it’s going to work.

Seth Bloom (04:11):
Maybe one of you can expand on that and actually give like a real world story, uh, about why the payment is so important. Uh, you know, not only do the small, I mean, we understand that if you’re the smallest company, uh, and you’re waiting on a payment for a big job that, you know, this could really, you might have to lay off workers. You may have to bankrupt the company, but explain maybe even at the small to midsize level, how important these payments are and how disruptive it could be. Um, if they don’t get paid timely. If one of you have a story about a past client that, that maybe would eliminate that

Ben House (04:45):
I’m going to pump that to Andy, because that’s really his wheelhouse.

Andrew Wyman (04:49):
Okay. Uh, yeah. You know, um, the, uh, again, the big problem that I see when it comes to payments and, and timing of payments really, um, is a contractor is not being real, real clear about what their expectations are from the beginning or, or binding the other party the proper way in the beginning, when you’re on bigger projects and you’re a subcontractor, sometimes it’s a matter of bargaining position. And sometimes it’s, you know, you’re not, you want this job. So that, that this contractor is offering to you, that you’re willing to accept uncertain payment terms or language and context that you frankly don’t understand, or haven’t seen before, or haven’t worked under to where, you know, you might be at the whim of some owner. And if the owner’s not paying the contractor, they’re not going to pay you, even though you’ve done your work.

Andrew Wyman (05:38):
And you’ve got workers were ready to get, you know, and, and deserve to get, to get their money. So, so, you know, a lot of the work that we do with contractors is, is upfront. Uh, you know, I have a lot of subcontractor clients who will present to me the contract that they get from these contractors and they say, Hey, here’s what you’re going to sign. And our job is to go through that and prepare basically a rider that the sub can send back to the contractor saying, Hey, okay, we’ll accept the contract. But with these changes and, and, you know, then look again, sometimes it comes down to negotiation and bargaining power, and it’s, if the contractor knows that you’re going to be a stickler for standing up for yourself and setting up your rights, he may go elsewhere with that job has to be something you’re willing to accept though. Um, because you know that that’s usually better than working on a job under some really bad contractors.

Seth Bloom (06:30):
Well, thank you for that. I’m sure there’s a lot of people out there that completely understand that situation and are going to take some of that advice. Um, the next one we’ll talk about is steps to take, to avoid payment problems. And I know that’s a pretty big area. And, uh, Ben, since Andy just finished, just talk in there and I’ll start with you on this one.

Ben House (06:51):
Yeah. Well, um, you know, it’s funny, we’re putting on a presentation with Levelset here and, you know, there’s a reason for that. Um, lanes lanes are good. So figure out how to do them, whatever state you’re in, I’m in Texas. Uh, Arlene law is just wild and by wild, I mean, not very good. It’s just, it’s very difficult to follow lawyers, struggle with it. Uh, all the time, all the time, it causes disputes. It causes litigation. Uh, my clients who are your mom and pop subcontractors, even your really frankly rather sophisticated mid tier sub cut, $5 million plus operation subcontractors don’t have a chance. You could hire personnel for this and you don’t have a shot at getting it right. You can hire a cm out of college, which is what I went to school for. And we’re not going to have a shot at it, documenting the project properly to get you lean, at least in Texas.

Ben House (07:48):
It’s that dense, it’s that complicated. Uh, there’s a lot of reasons for that, which I won’t go into right now. Uh, and the second step I would say is you have to understand your contract is what Andy said. You got to talk to somebody about it on the front end. Uh, I have subcontractors who routinely just here in Houston, got it, got an 80 page contract, subcontract back, sends it to me. And I, you know, I did exactly what Andy said. I lined out the issues, but at the end of the day, I, I told him, and we’re here to talking about payment. My advice was be, be capable of funding. This project yourself have, have whatever you need in place to fund this project yourself. Pretend you’re not going to get paid till the end of the day. And maybe later be prepared for that. Not everybody can do that. This, this, these folks on new could, but sometimes that’s what it takes.

Seth Bloom (08:38):
Andy, do you want to elaborate on that or a little

Andrew Wyman (08:40):
Bit? I think again, certain subcontractors are saying it’s not everybody, but they’re, they’re almost afraid sometimes to, to be assertive about their rights and the rights to get paid. And if you’re a subcontractor I’m in Florida, if you’re a subcontractor and you don’t have a direct contract with the owner of the property, you need to, there are steps you need to take at the beginning of the project, sending a notice to owner to the, the owner and the contractor, um, that is going to protect your right to maybe file a lien later on. Should you need to do that? But if you don’t take that initial step, you, you blew it. You never have the right to file a lien. Some contractors are, you know, at the beginning of a project, things are going well, problems haven’t really developed. They kind of think that if they do something like to send the notice to owner, which protects them, that that’s going to be looked somehow as it being an aggressive step, that was going to be looked down upon by the contractor or the owner.

Andrew Wyman (09:34):
And they’re all of a sudden going to be put in a bad light. I would strongly encourage you to get over it and, and, and, and realize that all you’re doing is you’re, you’re standing up for yourself again, a noticed owner. Doesn’t, it’s not a lien on the project that doesn’t create a problem for anybody it’s statutorily in Florida. Then the step that’s necessary for you to take, to make sure you protect your right to get paid later on. And you’re the only one who suffers by not sending it. And frankly, I think that there is a respect to be earned by these larger contractors, especially if you’re dumping around in the pool with them for the very first time that you follow what the statutes require and protect your rights. They’ll realize that you know what you’re doing as a contractor and a business person. And I would think that, uh, you know, they’ll, they’ll respect it. And I think they’ll treat you better if, if they know that getting paid is important to you.

Seth Bloom (10:25):
Thanks. That’s super helpful. I think I have one question, which I know Ben, you alluded to where we started talking about mechanics lanes and that’s something that here at Levelset, uh, we’ve been doing in all 50 states for a number of years, helping people file, uh, mechanics lanes and making sure they get paid, but maybe you alluded to Ben that Texas has so many complicated laws, uh, already lanes. So I thought maybe you could point out some of those unique, uh, legal challenges and then maybe Andy, you could chime in on what Florida does better or doesn’t do. Cause I know people out there watching from Florida and Texas kind of similar states kind of similar

Ben House (11:07):
So far, they are procedurally in a lot of areas. They are. Uh, yes. Uh, okay. So, uh, homesteads in the constitution, Texas says you get a, uh, lean as a mechanical material man on homestead, except then they, statutorily came through and said, somehow the statute gets to augment requirements of the constitution, which is, I always thought that was iffy, but, uh, the courts have kind of blessed it. And therefore there’s a there’s additional requirements. Um, such as were the contract with the homeowners actually signed the office of, uh, uh, either an attorney or a title office, or I think there’s one other option. And if it’s not signed there, you’re, you’re Sol for lanes on a homestead. So when I have folks call me up and say, Hey, I want to lean this homestead. Uh, if it’s not new construction, which is a loophole to that issue, man, you’re in trouble.

Ben House (11:59):
And, and you know, when you’re, when you’re litigating against a homeowner, what everybody’s largest asset is what their home, right? And, and if, if the home is not an asset and in Texas, if you don’t have a homestead lane, you can’t go after a home. It’s not possible. It’s, it’s, we’re kind of a debtor Haven historically. And a lot of those laws still exist. Uh, same with Georgia. And I think probably a little bit in Florida. So if you can’t go there, you can’t go after their cars, you can’t go after their personal effects. It’s just a homeowner. And they’re what we call judgment proof a lot of the time, even if they’re fairly well to do in Texas. And frankly, so, uh, I have to, I have given that speech a lot, uh, and it’s a bummer. So you got to, you gotta line it down in the beginning for sure. Got to know. And

Seth Bloom (12:46):
Any nuances in Florida about filing lanes, is it, is it easier? Is it harder than what Ben sounding Texas or anything that people should be aware of?

Andrew Wyman (12:57):
Um, I think it’s a look, it’s not, it’s not complicated to get a lien filed. I mean, but there are the laws themselves are very unforgiving, right? There’s a lot of timelines. You need to be aware of both on the front end of a project. Notice if you need to give, uh, your timing of these notices, your timing of, um, of, of leaning the job itself. And it’s different if you’re a contractor with a direct contract with the owner versus a subcontractor versus a material supplier, right? I mean, you know, if you’re a material supplier, for example, you know, again, likewise you have 40, you have 45 days from your first providing labor materials to the job in order to send that notice to owner, that’s going to preserve your lien rights later on, but it’s, it’s, it’s even, um, if you’re a material supplier that is specially fabricating particular, uh, materials for that job, your, your timeframe may start even earlier from when you start fabricating those materials and not when they’re delivered to the job.

Andrew Wyman (13:49):
I mean, there’s just a lot of little nuances like that, that can really trip you up that I know the folks at Levelset know all about. And you know, when people come, when contractors come to me about getting a lien filed for them, uh, sometimes I do that sometimes I direct them to Levelset because it’s, and I’m noticing the owner, I always direct them to Levelset because it’s just, it’s you guys just get it done much more quickly. Um, and, and, uh, and it’s always right. So I, you know, I encourage, I encourage the contractors to be working with someone, either a lawyer or a company like Levelset and not try to just take it on, on their own. Um, especially when, if you, if you, on a lean you can include, you’re only entitled to lean for work. You’ve actually performed for the value of work you’ve actually performed, but not yet been paid for it. A lot of contractors don’t understand that they put in whatever’s left do, and under the contract that they haven’t paid or they’re adding, you know, they’re adding their attorney’s fee into it or, or, you know, certain other charges that they’re not allowed and that’ll invalidate a lien on space right off the bat. And so, you know, I mean, it’s just tricky and you need to get the guidance.

Seth Bloom (14:51):
Thank you for the plugin. We appreciate it. And we’re always looking to file liens when people need them to help them get paid at Florida. Um, I guess we touched on this a little bit, but, uh, I’ll, I’ll start with you, Andy. Cause I know I’ve let, I’ve let Ben steal your thunder a few times, uh, by, by kicking it off. But, um, just some stories of success you have, um, either working with Levelset, um, if legal guard’s appropriate and, or, um, we’ll talk about legal guard in a minute, or just some things that you found, um, that helped people get paid and have been successful, uh, procedures to kind of smooth out business operations.

Andrew Wyman (15:33):
Yeah. So, you know, lots of times when I’m first meeting a contractor as a client for the first time, it’s, it’s usually because something has gone wrong on a job. They haven’t been paid for one reason or another and maybe it’s, you know, and they, and I asked to see their contracts that they use. And it then becomes pretty, pretty clear why, right? I mean the con and usually it’s a contractor. They, they used to work for somebody else and now they’ve opened up their own shop and they’re out on their own. And they’ve Frankenstein together. Some contract that from that their former boss used to use and half from, you know, what they Googled and found online. And it’s just, it’s internally inconsistent and it creates, you know, uh, confusion and confusion coupled with usually a lack of communication between a contractor and an owner is usually what will lead to payment problems.

Andrew Wyman (16:17):
So, so the, the, the goal is, yeah, you, you, you come to me and we may or may not be able to get you paid on that job based on what you might’ve already messed up or screwed up along the way. But the goal is to make sure that we learned from that experience and that it never happens to you again. And so to work with a lawyer to fix this contract so that you have a reliable, predictable, you know, document you can use and present to customers going forward, um, is, is how you, you cure that, uh, for, for folks and, um, you know, having a lawyer and you can trust them, go to, uh, to do that for you and with you is, uh, you know, is, is where the success comes from. Um, demo.

Seth Bloom (16:56):
I think that’s something we try to stress here. And I think one of the, one of the, uh, goals of, of, of Levelset is for that proactive, legal work is getting things done right from the start correctly. Uh, and as we’ll talk about legal guard in a few minutes, I think that’s one of the it’s much better. It’s much less expensive. Uh, you get paid easier if you’re proactive versus reactive, but of course, as you, you know, illuminated in your first few seconds, they’re talking to Andy most of the time when people come to you, it’s because they have a problem and sometimes that’s too late, but, uh, hopefully it’s a small problem and they can now correct that and get into a better, uh, flow of, uh, good legal hygiene. As I sometimes like to say, good, brave construction,

Ben House (17:43):
Good legal hygiene, then we’re, where are you on this? Um, J it’s it’s good legal hygiene is I’m still in that. That’s literally the perfect way to put it. Um, if we’re on, on the broad spectrum world of self-help as a contractor in 2021, or even really in the last frankly, 2015 years, you cannot afford to not be somewhat sophisticated in the lean in contract world handshake stuff is, it’s just, it’s just not there anymore for the huge percentage of projects that I deal with. And frankly, when somebody knocks on my door and says, Hey, um, you know, we work with Levelset to, to, or, or, you know, uh, whoever, uh, to, to, uh, family attorney, whatever, to try to get these liens on file. I go, yes. Okay. We got something to work with. Let’s go. Uh, and if they don’t and you know, it’s six months down the road, cause usually like Andy alluded to, uh, nobody’s complaining because they’re upstanding people and they just don’t, that doesn’t feel right to them. Uh, you know, I’ve got a breach of contract case or there was somebody in the chat that said, Hey, can I, can I lean up a governmental entity, a state? And I answered, uh, yeah, you can, uh, in Texas at least, and you better because if you don’t, you don’t have any other rights. You can’t Sue the state on a contract unless you have, if you’ve got your lien rights here. So it’s just absolutely critical. I can’t even, I don’t even have my backup plan of, uh, of a breach of contract suit.

Seth Bloom (19:16):
Well, we’ll move on to the next spot. And that is legal guard. I think this is a good segue to legal guard. Um, and it’s one of the new products we have here at, um, at Levelset. And I think why it’s so important is because we just started talking about proactive versus reactive, um, legal support and how that can help you get paid quicker so real quickly. Um, and I think, uh, Andy and Bannon, we’re gonna hear from them again in a few minutes about all the information they’ve been giving you about getting paid. Um, two things about them is they’re both in our legal guard network. So what Levelset legal guard is, is legal guard is a legal plan for people exclusively in the construction industry. And that means you could be a supplier or a sub, a general contractor, roofer plumber, and any of those things and utilize legal guard.

Seth Bloom (20:10):
What legal guard does is this is a subscription-based model that’s paid to Levelset. And then we pair you with a lawyer in your area. That’s a construction lawyer that handles construction disputes. That’s already been vetted by us. So we know that a substantial part of their practice is handling, uh, construction disputes. Um, from there, you’ll be able to get certain benefits from that lawyer. You’ll get free consultations, you’ll get some, uh, analysis of your legal problem. Uh, in addition to that, you’ll get 10% off whatever the fee is, whether it’s a flat fee or typically an hourly fee. But I think one of the big parts this to understand is that, that this is bled in someone like Ben or handy, make sure you’re doing the right things with your business from a legal standpoint, so that you don’t get any payment problems. And I think that’s really where legal guard shines as a proactive, legal solution.

Seth Bloom (21:04):
Having a lawyer ready. If there’s a problem, having a lawyer look over contracts, um, write a letter if need be, or just give you the analysis and the insight that you need before making a mistake. A lot of times, just like Andy talked about the first time a potential client is calling you. And a lot of times when people are purchasing legal guard, they have significant legal problems. Although we want to give you discounted, uh, legal help and more access to construction law. If you have been as Ben liked it, if you have poor legal hygiene and you’re calling Ben up after buying our subscription and you have five pending lawsuits against you, the subscription is not going to cover that. And you’re going to be way outside of the scope of the subscription. And you’re going to have to put down a traditional retainer and you will get all the benefits of legal guard, but you will be billed for that type of work.

Seth Bloom (21:59):
So I just kind of wanted to go over what Levelset is, uh, what levels of legal guard is and how it can be used and how we’re super excited, uh, about selling it and offering it. We’re in 17 states now, plus DC, including both Florida and Texas. So we look forward to connecting more people with lawyers, um, like Ben and Andy through legal guard. So, uh, and if you ever have any questions, you can email my team or me directly, uh, to talk more about it. Um, right now I’ll open it up to everyone, uh, in our group about questions. Uh, if there’s any questions out there you may have, give me a moment and I’m going to pull them up and we’ll have Ben and Andy, or if there’s a question for me, I’m happy to answer it.

Ben House (22:48):
I got to brag a little bit, Seth, I, you sent me, you say Levelset sent me a company to assist, oh gosh, probably a couple months ago now and worked through it. And, uh, without litigation paid a hundred percent, I’m kind of proud of that one. That one just, just came in the other way. And honestly, I was thinking, man, that’s, you know, even with lien filings, Andy can probably tell you how often they just go. Yeah. Okay. Got you. The check. Yeah. It’s not always, so it’s not even close to always, so it just gets you kind of in line, which is good, but that was, that was a good feel, feel good moment. And a client was very happy. Of course. So that was neat. It’s a good bridge Levelsets a cool bridge so far.

Seth Bloom (23:33):
All right. So, okay. I have a couple of questions here. This is from, uh, Louis. Uh, are you going to cover government, uh, slash public works contracts, bond and such? Well, we didn’t, but if one of the two of you want to jump in and give a, uh, a quick, a quick, uh, highlight of that, then that would be great.

Andrew Wyman (23:56):
Most of my work that I do is on the residential side, um, more than commercial. And so, uh, I don’t really have the, um, occasion to be dealing with, uh, the government on the opposite end of, of, uh, contracts or, uh, too often. Um, I am familiar though without with, with bonds, with performance bonds and payment bonds. And certainly like in Florida, like the, um, you know, the notices that are required to a notice to owner, there are notices likewise that are required under bonds in order to preserve your rights and make a claim against the bond. Um, and, and the bond is like any other contract. I mean, it’s what you need to do is in there may not be easy to understand or read, and you may need a lawyer to help you, but, um, you know, there, there are similar, there’s a lot of similarities between dealing with, uh, payment bonds and liens in the state of Florida.

Seth Bloom (24:49):
Okay. Um, Ben, there was a question from Carissa, uh, I’m, I’m understanding you already have the ability and an ability to file liens against a state agency, but you answered it that, um, someone asked a California question, so I’m not gonna, I’m gonna want you post that in our expert center, on our attorney Q and a, you can get a California lawyer to answer that I don’t want to put either of these two lawyers, uh, or my stuff I don’t. I know I’m not, but I don’t think either of you are barred in California, so we’ll stay away from that. Sorry, that doesn’t mean we can’t help. We do a lot of business in California. We have legal guard lawyers in California and there’ll be a Levelset attorney network lawyers, excuse me in California. So we do have a lot of energy in California. So we, uh, post that on, on our, on our ask a lawyer question and we’ll definitely get you some answers. Um, let me see if there’s anything else here. I lot of California, so, okay. Do you notice this has to be sent to all parties listed on the deed or only one, uh, that have, that you had, that this person particularly had a contract with?

Ben House (26:00):
Uh, I can’t tell you, I can’t get that specific without knowing the state. Um, if it’s California, I don’t have a clue if it’s Texas. No. Uh, but it’s safer to do it that way. Um, if you have multiple parties owning a, uh, owning a, a section of real estate, um, you know, it’s, you could ostensibly go to who’s acting as the owner on the project because Texas law is a little wider there. It actually lets you be wrong. It, the word is purported owner. So if somebody is acting like the owner and it has represented to you that they own the property, you can, you can just send it to them and you’re probably safe. But I, as a lawyer, I pulled that, that deed and I see a bunch of owners, other, all getting everything yeah. A hundred percent. And if you’re handling it on your own or through Levelset and you’re, you’re entering the, the, uh, owner information and Levelset, I don’t think, I can’t think of a way that it could hurt you to, to utilize. Cause you can always, if you end up leaning the wrong owner or an ex owner or somebody who’s not on it anymore, uh, you know, just follow release a lean on that owner. And you’re good.

Andrew Wyman (27:01):
Yeah. I agree. Yeah. It doesn’t hurt you. But I noticed by noticing any and all owners that you believe have an ownership in the property itself, if you’re a subcontractor, you may not, you know, you have your contract with the contractor, but you don’t necessarily know who the contractor who signed the contract with the contractor. You don’t always have access to that document should, but lots of times you don’t, in which case you’re, you’re more or less looking up in the public records, the owner information for the property that you’re working on in order to be able to send this notice to owner. And yeah, you’re going to just list everybody.

Ben House (27:35):
Yeah. In Texas, there’s a, uh, there’s a requirement that the owner or general contractor, I think both are required to send subs, uh, that kind of information if it’s requested, uh, the problem is that in the statute, they forgot to add any teeth to it. So if they just ignore you, you you’re, you’re kind of okay, what do I do now? So you’ve got to get a little angry or yeah,

Seth Bloom (27:55):
I’m going to let another question or two come in. Cause we’ve got a lot of energy here. A lot of questions. Um, only a few of them were back in California and I know a person that’s in California. We do have lots of lawyers in California. We have legal board in California. I know we’ve been answering that on the side chat here, but just want to make sure that’s a, you know, hit us up. We’ll we’ll, we’ll get you some, we’ll get you some legal card real quick. Um, uh, uh, Elizabeth asks, we worked, we work as a specialty subcontractor, the contracts occasionally state that the GC pays us after they get paid any way around that. And I know that.

Ben House (28:35):
So in Texas, there’s, there’s two versions of that clause. It’s a paid if paid or a paid one, paid they’re both legal in Texas. One of them has a reasonable limit where if they don’t get paid for an unreal and do not pay you for an unreasonable period of time, the law kind of takes over and says, yeah, nah, you got to, uh, but pay if paid is legal, which means if they are just not paid above you. Yeah. You’re not paid either. And in that circumstance, you better have a contract with your sub that says that that puts those requirements above you, from your GC, into your subcontractor below you. So that if you, if they, if they have a pay to pay clause, you better have a pay to pay plus because of your protected to the same extent. But if you don’t, you can absolutely legally be left holding the bag. And I’ve had, uh, many clients just be shocked that that’s the case.

Andrew Wyman (29:25):
Yeah. Th those two clauses are, are, can be so painful for a subcontractor when you’re, when you’re down the line. And if it’s a paid, if paid clause and you know, you’re, you’re out again, you’re at the whim of it own as someone, you don’t have a contract. And so that’s, that becomes really tough. But yeah, Florida also has the prompt payment laws that, you know, will sort of kick in if, if, uh, if too much time has gone by and the contractor has received the payment, but it’s not paid you.

Ben House (29:55):
Yup. And, and Texas does have a version of that law too. If I’m not mistaken, I haven’t looked at this in a little while, but I think you can, you Texas gives you the right to contract around it. So if you’re in one, uh, if you’re, if there’s one of those 80 page contracts I was talking about earlier, you bet you, there’s a section that says the Texas prompt pay act is out the window. Yeah.

Seth Bloom (30:14):
Gotcha. Well, we’re up a few minutes over our 30 minutes and I want to respect everyone’s time. No one

Andrew Wyman (30:20):
Answering one question I just saw come through that deals with Florida though. Somebody asks absolutely. If a contractor has to be licensed to be able to place in the canceling. And I think it’s a question though. Yeah. That, that in Florida is real strict about the fact that if the work you’re doing requires a license, you better have a license. Um, and that flows through to the mechanical rights and can contract a constructively right state. So if you, if it requires a license to do the work that you want to lien, then you have to have the licensing it’s work that doesn’t require a license and you’ve worked at improve the property, but it wasn’t work that required a license. Then, then you can lean. Even if you have an lesson,

Seth Bloom (31:00):
Is that, is that the same in Texas men?

Ben House (31:03):
It is, uh, to probably a lesser extent because we don’t license general contractors here. Uh, there, there is, there is no license for general contractor it’s wild west. Um, so there there’s been movement in the legislature over the years to try to do it, but I guess we’re just a little too libertarian to, to let it happen. But, uh, um, mechanical electrical plumbing,

Seth Bloom (31:23):
Like I got a toolbox in my truck. I’m only three hours to the time, like a sign on your car door. Ma’am well, look, I really appreciate everyone that attended the webinar today. Special, thanks to Ben and Andy for taking time out of their busy law practices to do this for us, uh, to answer everyone’s questions, but we’re going to do more of these. I know we had a lot of California energy today. We certainly can have, we do have webinars about California law, that to you, we also do have, um, the Q and a section, which I know some of these questions will be posted to and you can post them or we’ll post them and we’ll get lawyers in your area in California to answer them. I saw some Kansas, Missouri people too, and I will caution you that you should, you know, most law is different in every state.

Seth Bloom (32:13):
Uh, the, the, the language can be different. So you shouldn’t rely on any of this unless you’re in Florida or Texas. And you heard better Andy specifically speak about a certain issue because other than that, it may not be applicable. Um, I’m in Louisiana and certainly here in Louisiana, some of our laws are very different. Um, but I wanted to thank everyone again. Uh, Levelset dot com uh, come check us out legal guard, uh, 16, 17 states plus DC in California. We’re ready to, uh, to, uh, sign you up and get new subscribers and help you get paid and help you get that legal help that, uh, I know everyone needs. So thanks again to everyone and have a great day and, uh, look forward to seeing you soon. Bye-bye thank you everybody. Thanks.