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Abdulaziz, Grossbart & Rudman Newsletter
June 2017
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Greetings:

We hope that you enjoy this edition of our Newsletter.
 
Remember, if there is anything that you would like to see in the future, please let us know.
 
Sincerely,
 
The Staff at
Abdulaziz, Grossbart & Rudman
Getting Paid!
7 Steps To Take BEFORE Starting A Construction Project
By Milene C. Apanian
Abdulaziz, Grossbart & Rudman
2017 is off to a great start for the construction industry! Most individuals and businesses are still committed to their New Year's resolutions. The article helps jumpstart, simplify, and streamline your commitment to increasing your profits. Follow the tips below before starting a construction project to expedite your future collection efforts. These suggestions

1. Gather Information About The Players
(name/contact/address/phone/e-mail)
a. Project/Property Owner
b. Direct/Prime/General Contractor
c. Your Customer
d. Payment Bond Surety
e. Project Lender
f. Fund Control/Voucher Company
g. Landlord and Tenant (if working on a tenant
improvement project)
2. Gather Key Information About The Project
a. Name
b. Physical Address
c. County In Which Located
d. Legal Description
e. Assessor's Parcel Number (for private
projects)
f. If a construction lender is funding the project
g. Anticipated Start Date
h. Anticipated Completion Date
i. Public or Private Project
3. Gather Key Documents
a. Building Permit
b. Notice of Non Responsibility ("NON" for
private projects)
c. Credit Application/Personal Guaranty
d. Purchase Order/Contract/Change Orders
e. Payment Bond
f. Plans and Specifications
4. Investigate Your Customer (Evaluate your risk, decide whether to do business or not)
a. Valid License: Visit Contractors State License Board website at www.cslb.ca.gov to confirm your customer's California contractor's license. Also look for your customer's license history, years in business, other licenses, prior complaints, and/or judgments, and business entity type. While at the website, confirm that your license is also active and valid. Under California law, unlicensed contractors can be denied payment and/or be required to return funds received for work already performed.
b. Confirm Legal Status: Check the California Secretary of State website at www.sos.ca.gov to investigate your prospective customer's legal status, including the key players such as the owner. Determine whether your customer is a California or out-of-state business entity; the number of years in business; whether currently an active, inactive or suspended entity. If your customer is a limited liability company, identify the members; are the members individuals, partnerships, limited partnerships, corporations or other LLC. Understand who the players are.
c. Credit History: If you are a material supplier, investigate your customer and the project owner's credit history. Require a personal guaranty if necessary.
5. Set Up Accounts
Insure that your accounting is in order. Set up separate customer accounts for each project and each customer on the same project. Confirm that all project documents, including all contracts, change orders, purchase orders, delivery tickets, correspondence and invoices identify the project name and/or number.
6. Agreement
Make sure your contract is valid and enforceable. If you are a contractor or subcontractor, prepare clear and concise contracts in writing. Obtain your customer's signature before work starts. Document extra work with written change orders, signed by the customer. Use updated and current form contracts and comply with statutory requirements. If necessary, consult with an attorney to clarify and negotiate contractual terms and to confirm that your agreement is valid and enforceable.
7. Timely Serve A Preliminary Notice
Preliminary (or 20 Day Notices) are prerequisites to any all stop payment notice, mechanic's lien and payment bond claims. Timely prepare and serve your Preliminary Notice to maintain your rights for payment on a construction project.
GOOD SENSE

A man walked into a bank in New York City one day and asked for the loan officer. He told the loan officer that he was going out of the country on business for two weeks and needed to borrow $5,000. The bank officer told him that the bank would need some form of security for the loan. The man handed over the keys to a new Ferrari parked on the street in front of the bank. He produced the title and everything checked out. The loan officer agreed to accept the car as collateral for the loan.
 
The bank's president and its officers all enjoyed a good laugh at the man for using a $250,000 Ferrari as collateral against a $5,000 loan. An employee of the bank then drove the Ferrari into the bank's underground garage and parked it there.
 
Two weeks later, the man returned, repaid the $5,000 and the interest, which came to $15.41. The loan officer said, "Sir, we are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multimillionaire. What puzzles us is, why would you bother to borrow $5,000?"
 
The man replied, "Where else in New York City can I park my car for two weeks for only $15.41 and expect it to be there when I return?"


Abdulaziz, Grossbart & Rudman
provides this information as a service to its friends and clients. This Newsletter is of a general nature and is not intended to be a substitute for legal advice. This Newsletter does not establish an attorney-client relationship with the reader. Since laws are ever changing, please contact an attorney before using any of the information contained within this Newsletter.
 
Abdulaziz, Grossbart & Rudman
6454 Coldwater Canyon Ave.
North Hollywood, California 91606
(818) 760-2000; (818) 760-3908 (fax)
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