In the latest issue of C&R Magazine, attorney and collections expert Angela Bajramaj tackles one of restorers’ biggest challenges – getting paid – in the article “Top Collections Strategies for Restorers.” The key to successful collections, according Bajramaj, lies in setting realistic expectations, implementing effective communication, and thoroughly documenting throughout the project.
Collecting payment starts from the initial contact with a prospective client – a happy client is much more likely to pay than an unhappy client. Restorers should treat clients with empathy and kindness while being mindful to set realistic expectations. They should refrain from making promises they cannot guarantee, such as fixing the property “better than before” or completing the work “in no time.” Instead, restorers should explain the general process and wait until an assessment is done before making specific representations regarding scope, timing, or cost.
Thorough documentation plays a crucial role in collections success. Restorers should document the project comprehensively, including before, during, and after photos, drying logs, moisture maps, and reports. This documentation aids in justifying charges and minimizing disputes with adjusters. Any unusual challenges or unexpected conditions should be well-documented, and signed change orders are necessary for any changes to the project scope, pricing, or completion timeline.
Professional and clear communication with all stakeholders involved in the project is essential. Regular updates and systematic communication keep everyone informed about project progress, challenges, and financials. Such communication prevents many obstacles to payment and strengthens the restorer’s position in case of disputes.
In cases where issues still arise with payment, the article suggests a few tools to help maximize chances of recovery. One effective option is recording a mechanics lien against the property, impacting the owner’s ability to sell, refinance, or access equity until the amount owed is settled. Restorers should be consistent in managing delinquent receivables and, if necessary, seek the guidance and counsel of a legal professional.
Angela Bajramaj, is a licensed Michigan attorney and a Partner at Law Offices of Edward H. Cross, with expertise in collections. She also holds a general contractor’s license.