There has been an uptick in builder/supplier disputes over the past couple of years.
The supplier disputes range from overbilling, to credits not being issued as promised, to wrong addresses, and wrong companies being billed. Transition problems from the continuing mergers and buy-outs in the industry are the primary culprit. Supplier relationships that were built over 20 plus years are now gone. Instead of the local representative having wide latitude to write off or resolve a dispute, people in tall buildings far away are making those decisions.
Here are a few tips that should help you navigate through this new supplier landscape.
Always, always review the invoice thoroughly.
Suppliers are humans and they make mistakes. Do not hesitate to point out errors in the invoices. Do it as soon as you can, so they invoice does not turn past due before you make your complaint.
Make sure the project address is correctly identified with the exact street address of the project being billed. If it does not yet have a street address, be sure lot and block and subdivision are noted. Do not let the supplier bill more than one project on the same invoice. If they do that, return it and ask them to break it out. If you have more than one company, make sure the supplier bills the correct entity. Be precise to make sure it is the full corporate name. Sometimes builders have several entities but comingle the d/b/a and allow that on the supplier invoice. That will just help out a homeowner’s attorney when they are trying to find money.
If you rent equipment…
Take daily pictures of the machines on site. Record the serial number on the machine if possible. If you do not have photos and are being incorrectly billed, press the rental company to prove that machine was on your project at that time. All equipment has air tags or GPS on their machines to tell the rental company where the equipment is. If they refuse to provide the data, that could be good evidence they made a mistake.
If a machine breaks down and you request a service call, make sure to do your own documentation of when, where and how long it was down. And if you want a credit, make that request in writing (not a text) and do it before they send you the next round of bills so you have a paper trail.
Be careful about personal guarantees. I know most supply houses will not rent without them. But read the language in it. Make sure that if there is default, you get plenty of notice to make it right.
Most suppliers are honest companies just trying to make money. But in the 2023 business environment, we must be vigilant in holding all companies responsible for accounting and documenting mistakes. Be sure you whoever pays the bills at your company pays close attention to invoices, knows the rules about the project address being on the invoice, and requests any needed changes be made before it is too late.
Matthew L. Motes is a partner in the Fort Worth office of Shackelford, Bowen, McKinley & Norton, LLP, and can be reached at 817.887.8161 or [email protected]. The firm also has offices in Dallas, Austin, Houston and Nashville with a strong foundation in all areas of construction law and construction/design defect litigation.
