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Problem Condominiums That Won't Pay

Discussion in 'Business Fundamentals' started by PGLC, Jan 2, 2009.

  1. PGLC

    PGLC Junior Member
    Messages: 27

    We added 5 new condominium associations this year for snow plowing services. Our agreement calls for plowing of the drives and sidewalks for snow events of 2 inches or greater. They recently contacted us to clear snow drifts of 2 to 3 feet in height due to a wind storm over 2 days. Since this events was not under our contract, we informed them this plow/shovel would be charged in addition to the contract. Now that they have recieved our bill they will not pay as they say the fees and hours involved are excessive. We charged $95 an hour for 5 hours per condo complex of 15 units each. Each condo had drifts of 2 to 3 feet in depth in front of garage doors, entry doors, and sidewalks. We mainly shoveled due to the proximity of the snow to the doors and walks so this accounts for the long hours (very difficult footprint to work around). Now in addition to saying they are not going to pay for these additional services, they are now saying they are cancelling our contract. One condo complex is even billing us for snow services because one of their residents wanted to use their snow blower near their garage after we plowed. Any advice on how to proceed? I will most consult with an attorney next but thought to ask around before I do anything. Thanks.
     
  2. JDiepstra

    JDiepstra PlowSite.com Addict
    Messages: 1,780

    Yes, sue them.
     
  3. plownoob

    plownoob Senior Member
    from ny
    Messages: 128

    yeah, sue them not only for the work done, but also for unilaterally canceling the contract. Whats the friggen point of a contract if it can be canceled just because you feel like it.
     
  4. Pristine PM ltd

    Pristine PM ltd PlowSite Veteran
    Messages: 3,795

    I hate to tell you this, but drifts and normal snow are looked at the same for us. I can see how they had a problem with these extra charges. Unless your contract says that you are only there to plow for events and any drifting is extra, I don't know how you could charge for that... sorry to hear that it happened how it did, but in the future I would be very clear with people what the extra charges could be like and why they are there.

    No one likes getting charges for a few thousand that they didn't know where coming and thought that they were paying for already.

    Our contracts actually meantion drifting, because it is a normal part of snow events.

    You should also get 30 days pay for losing the contracts.

    Did you get a purchase order before performing the work?
     
  5. StratfordPusher

    StratfordPusher Senior Member
    Messages: 951

    Could not agree more

    Snow is snow when it comes to condo folks and contracts..... best to cancel the extra billing, admit to making a mistake and try and save the contract......

    My two cents

    Al


     
  6. cretebaby

    cretebaby PlowSite Veteran
    Messages: 4,162

    I would have to agree

    Why would you charge out drfiting snow as an extra?

    why does it matter if the snow fell vertically or blew in horizontly

    I wouldnt want to pay it either
     
  7. Randy Scott

    Randy Scott Senior Member
    Messages: 142

    Did you have a "change order" contract signed by the proper board member? If not, good luck getting paid.
     
  8. Rc2505

    Rc2505 PlowSite.com Addict
    Messages: 1,245

    I actually have drifting written as a seperate charge in all of my contracts. Drifting, and plow ins are billed at a different rate than normal plowing. I do this because as I finish my route, I drive back past each account. If the city, state, or county trucks have plowed them back in, I charge extra to clean them back out. If I have to drive back past all of my accounts, and don't drop the plow, then the gas is on my dime, but if I have to go clean up each one then I am able to charge additional money for it. Drifting is the same thing. Once I have clean the lot, if the wind blows it back on the lot, I am able to charge additional monies to clean it all out again.
     
  9. Pristine PM ltd

    Pristine PM ltd PlowSite Veteran
    Messages: 3,795

    nice if you can get it, but I wouldn't be able to sell that in my area...
     
  10. musclecarboy

    musclecarboy 2000 Club Member
    Messages: 2,303

    Not sure how you could charge to remove the municipal truck's snow bank, thats a given during snow....
     
  11. TPC Services

    TPC Services Senior Member
    Messages: 875

    Never had that kind of issue before, but we do not bill it as extra's just as another trip out with reg rates for a new event or clean up


    the city plowing the roads out and pushing snow back in to the roads& drives you just clear is par for the course and should have been thought about before you ever bided it, is not the clients fault that you got your work done before the city crew did, may be you should wait untell they get it done, (JMO) not realalistic though, that way your not wasting the clients money by charging for something that should have been included! and some one else comes in an under bids you for that, they all ready included in there bid!
     
    Last edited: Jan 3, 2009
  12. PGLC

    PGLC Junior Member
    Messages: 27

    Our contract doesn't mention drifts specifically but mentions snowfalls of 2" or greater. Anything beyond that is mentioned as an extra charge in the contract. We had a nice working relationship so we trusted the condo presidents when they verbally requested us to perform the extra services. We verbally told them that these services are an extra charge and they all indicated to us we should bill them extra. I even have a couple emails from them indicating such so that is somewhat in my favor.

    If I take one thing away from this, it is never to trust in business and always get written authorization in a purchase order when performing services outside your normal contract. Thanks for your comments.
     
  13. PGLC

    PGLC Junior Member
    Messages: 27

    The reason for considering the two as different is because they wanted a bare bones agreement with the most economical price we could do. Because of this, we specifically identified anything beyond a normal snowfall as additional services. We discussed the terms with them and everyone was on the same page. The day they requested the work from us they specifically said and I quote "we know this will cost us so just bill us". We are not out to hurt our rep so we billed them for the actual services performed. From now on I don't think we will modify agreements to satisfy customer's wishes as it seems to bite you in the end. Thanks for your comments.
     
  14. Rc2505

    Rc2505 PlowSite.com Addict
    Messages: 1,245

    I sat here and thought about the whole why should I charge extra for something that should have been included, and came up with this answer. It makes sense to me so here it goes.
    In my contracts I have a gaurnteed time for all my properties to be cleaned out by. I have to adjust my schedule to make that promise depending on the snowfall amount. So sometimes that means I have my lots plowed before the city, county, or state get their roads done. If I keep my promise, and the lot is completed, then why should I not charge additionaly for extra work that has already been completed once?
    I have had this same verbage in my contracts for over 5 years now, and have never had one complaint. I have had the same customer base for the same 5 year period. I have picked up a few new ones, and dropped a few old ones, but I have the same base customers for 5 years, and they haven't even questioned it once, not even the new contracts I have picked up.
    I don't understand how anyone can continue to visit the same place and keep plowing at no additional cost. Last time I looked you don't get free gas, just because you topped off once. It all costs money, and this is how I recoup these costs.
     
  15. Green Grass

    Green Grass PlowSite Fanatic
    Messages: 9,573

    you should charge them for normal snow removal if drift removal is not listed as an extra charge. Trust me you will loose if you sue cause you preformed snow removal which your contract states that you will do for a price. How do you get $95 an hour there? is that per person or for a crew??
     
  16. PGLC

    PGLC Junior Member
    Messages: 27

    The $95 was for a crew.
     
  17. KAG

    KAG Senior Member
    Messages: 114

    Don't have a good answer but if you feel its owed to you then I would agressively try to collect. You might also simply write them a letter stating even though they approved it prior to the work being done you will settle for the normal plowing rate and write the rest off.
     
  18. Green Grass

    Green Grass PlowSite Fanatic
    Messages: 9,573

    Where you at in Wis? If it where me I would just bill it at a normal event and in the future make sure that you have a section in the contract that talks about drifs and how they will be billed. I would try to keep the contract to make more money on them in the future. Just call them and tell them that you will take care of it as long as they pay for a normal service and keep using your services.
     
  19. big acres

    big acres Senior Member
    Messages: 653

    Bidding condos is as cutthroat as anything. They have likely received a shatload of service under the monthly contract already... much more than they probably paid for. You are damn straight you should bill it as an extra.

    1. They asked for a job to be performed with a desired result.
    2. You informed them that it would be T&M, and they agreed.

    In Ontario I can see where drifting is looked at the same, maybe Cretebaby is rural and his customers don't get it. Around here we have two words "Snowfall" and "accumulation" which tie it all to how much snow fell in a single 24 hour period. In 1991, we got 21 inches of dry powdery stuff that blew around for weeks. people with all inclusive contracts held contractors to it and many folded. I know 21 is nothing for some areas, but everyone in the market tends to have enough equipment to handle typical snowfalls. This one was out of the norm and since then everyone goes to hourly for over 10-12 inches and charges extra for clean-up of blowing and drifting unless it is expressly written into the contract.

    DO NOT GET WALKED ON. Call them and let them know you would like to discuss it a bit because you appreciate their business. Comp them a couple of hours if necessary, but let them know they are being given a freebie.
     
    Last edited: Jan 4, 2009
  20. big acres

    big acres Senior Member
    Messages: 653

    $95 per hour for a whole crew???? WTF. These people should be ashamed of themselves. They obviously don't have anyone with a shred of common sense, business experience, or at least morals on their Board of Directors. You do not want these people as customers. Stick it to them with your "out-clause". Better yet, give 'em my number and I will educate them.