Mastering Georgia Contractor-Subcontractor Relationships

As a Georgia contractor, you may have been in situations where you find yourself chasing money that’s owed to you for work you’ve already completed. This may be in the form of homeowners refusing to pay, or even getting paid from reputable contractors while working as a subcontractor on the job. 

We’ve worked with local subs and contractors, both residential and commercial, who have run up against these very frustrating situations. And one thing is consistent. We find again and again that a little upfront work can save you and your business a lot of time, stress, and even cold hard cash down the road. So with that said, let’s dive into how you can help protect your contracting business’s bottom line and get paid by contractors on time.

Measure Twice, Cut Once

If you’ve been a Georgia contractor for any substantial amount of time, you’ve likely worked as a subcontractor under a contractor at some point or another. Where instead of being paid directly from the homeowner or business, you’re paid by the contractor for the work you complete. Or, if this opportunity hasn’t yet come up – what we’re about to review will set you up for success from the get-go!

There may be times when you’re asked by a contractor to hop on a quick subcontracting job as a favor, or maybe you’re happy to take the job in between larger projects you have in motion elsewhere. No matter the reason, or how small or simple the job seems… be sure to get a signed contract in place if more than a few hundred dollars are on the line. 

And rather than using the contractor’s universal subcontractor agreement (if provided), present your own contract. That way, you are intimately familiar with the terms of the agreement – and you can properly measure twice, and cut once. Or said another way, you can be sure to set up a favorable agreement for you and your business that doesn’t get caught in refusal-to-pay or overdue-payment-collection territory. 

As you may imagine, when you’re staying busy between your open projects, the last thing you want to do is have to chase down money that is rightfully due to you just because you didn’t get the details ironed out on paper. You can certainly spend your time and skills much more effectively working on your next project, rather than tied up in frustrating administrative work (for you or your team members).

Turn The Pressure On

By providing your own contract for subcontracting jobs you accept, you’re turning up the amount of pressure on the contractor in a professional and clearly defined way. Your contract gives you the opportunity to outline what is (and is not) included in the scope of the project, job site requirements (such as equipment provided, out-of-pocket material costs, etc.), and how much and when you’ll be paid for your completed work. 

At our law offices, we’ve seen our fair share of subcontractor disputes where the lead contractor doesn’t feel the contractual pressure (since the details of the arrangement weren’t clearly defined on paper). Therefore, the contractor attempts to negotiate on the price of the job. Typically they don’t dispute that the work that was completed by the sub. However, without there being a crystal clear dollar and cent price on paper, the contractor sometimes attempts to get a better deal out of the situation. Cutting into you and your business’s valuable profit margin.

Prudent Next Steps

If you’re looking for guidance on your options for an unpaid contract, or maybe you’re ready to be proactive to avoid these situations – we can help. We’re intimately familiar with your rights as a Georgia contractor and have worked with many contractors that have found themselves against these same kinds of hardships and opportunities. We find time and time again that a little bit of buttoning up your contract today can save you a lot of time, money, and resources down the road.

We welcome you to give us a call for an exploratory conversation on what next steps may be best for you and your contracting business. We can be reached at (678) 694-1250.