| Thu, 08/18/2011 - 10:29am | |
| Debra Hansen | As a general contractor we have on occassion been asked to comply with joint check agreements between our sub and their supplier, it did not happen often and when it did, it was a simple agreement, which also gave us reassurance that the supplier was being paid. Recently, we have been receiving many requests for joint check agreements and in speaking with one of our subs, they said that's their normal practice. Not only are we being requested with more agreements, they are becoming much more complex, it's not just a simple check exchange, they want us to be held liable, if we mess up (which I won't agree to) they want to make sure we only pay certain amounts etc etc. My question, is as the general contractor should we start charging a fee for this service? I feel that we are now acting as their unpaid bookkeeprs. Any thoughts out there would be appreciated. |
| Tue, 10/11/2011 - 5:22pm | #1 |
| Kerry Sloan | You should never agree to a joint check to any 3rd party who does not have lien rights on your job (Banker, Wholeseller, etc). Your subcontract should prohibit the sub from assigning his contract rights without your agreement. I agree with other responders that it is preferrable to go to the extra trouble of writing joint checks than to have a supplier go unpaid and file a lien. Most good software packages handle the writing of joint checks with ease even after the invoice has been processed as payable to a single vendor. |
| Thu, 08/18/2011 - 7:13pm | #2 |
| Lynn Hanson | This has been a hot topic around my office for several months. Today we cut a a check and five joints for one subcontractor. I would be interested in seeing anyone's joint check agreement that includes language about charging a fee for joint checks if you don't mind sharing. My email is lhanson@gnrgc.com. Thanks. |
| Thu, 08/18/2011 - 2:18pm | #3 |
| Scott Oberschlake | Our joint check agreement states that we can charge the subcontractor $50 for each joint check. We usually don't charge the $50 unless the subcontractor is a pain because I feel much more comfortable knowing the supplier is getting paid. Furthermore, we will not sign any joint check agreement besides our own which specifies that we are not creating an agreement with the supplier and will only pay the amount due when we are paid by the owner. In my opinion, joint checks are a necessity in this economic environment to protect your own assets. |
| Thu, 08/18/2011 - 2:13pm | #4 |
| Jean Snyder | We have also seen an increase in requests for joint checks. It is a sign of the times, especially if you work with smaller subcontractors. We do not "negotiate" the terms of the joint check agreement. We have one form that we use. We do state in the initial documentation with our subcontractors that we reserve the right to charge $25 per joint check for processing. I believe this prevents subcontractors from utilizing us as their bookkeepers and I find that we are often the one initiating the use of joint checks as it is often to our advantage - as you say, to give us reassurance that their suppliers have been paid. We do not accept this as a standard practice, but do utilize it to protect suppliers when circumstances warrant. |
| Thu, 08/18/2011 - 12:18pm | #5 |
| Steve Mooney | We are a specialty trade subcontractor who has been in business for over 60 years. Suppliers are paid timely and we are more than happy to supply our bond on sizable projects from our A+ rated bonding company. Therefore, we do not enter into any joint check agreements and believe they imply a lack of financial strength to our suppliers. |