Cheque bounced !

[NYM1]

Hi,

I'm new here and if I've posted this question in the wrong place, I apologise !

We are a scaffolding company that supplied and erected scaffolding for a RTM Limited company to enable external decorations.

We were paid by cheque, but that cheque has 'bounced'

We were assured by the company that it must have been a mistake, and they issued another cheque. That has now also failed to clear.

Is there anything that we can do to recover this money or do we just have to suffer the loss which will undoubtedly, impact on us greatly.

 

[DavidBHill]

The obvious thing to do is to get in your car and go and sit in their reception until some one agrees to see you. You must be polite and determined (not aggressive) but from experience it does work.

Good luck

 

[amich]

I second calling around and collecting the cash in person; no harm if they happen to have customers listening in (though don't let it escalate to avoid being accused of harassment).

Should you decide to go the legal route, the cheque rule might be useful.

 

[Steve Sellers]

The bounced cheque rule is one possible route.

May I ask how much the cheque was for?

Do you have t+c's that stipulate an interest rate on late payment?

 

[Charlie B ACS]

Like they ^^^^^ said.

if that doesn't work then issue a Letter Before action, give them 7 days to pay, then submit a county court claim via moneyclaimonline.

You can charge interest & fees - google Late payment of commercial debts act.

Lastly, have you credit checked them, if they have outstanding CCJs you may not get any joy anyway, and need to consider throwing good money after bad.

How much is the debt?

 

[NYM1]

Many thanks for your replies.

Unfortunately, in this particular case it wouldn't be possible to do as suggested.
They're a 'Right to Manage' company which has been formed by the lease holders of the building. All the flats are private and entry clearly isn't allowed uninvited.

Thank you Amich for the link to the cheque rule...I'll certainly look into it. It might be our only route.

Unfortunately mad I've just had a telephone call from the decorators employed on the works. His cheque has also bounced. He was told by the RTM company that the cheque he had been issued, had been signed by someone not authorised on their account.

Never having seen the signature of the authorised user of that account, I just hope that the cheques we've had were indeed signed legally !

This just gets more and more distressing.

 

[NYM1]

We do have something in our T&C's about interest being charged..can't remember off hand what it is...it's something like 5% over current base rates. Never had to use that t&c as we've never encountered non-payers before.

We've not Credit checked them either...(I could kick me..so no one else needs to )

The cheque to us was for just over £2500

 

[Steve Sellers]

The cheque to us was for just over £2500

You do have the option to issue a statutory demand then. This would mean that if they don't pay you within 21 days you would be able to make an application to wind up their company. This is an extremely good method of shocking people into paying, or if they are having troubles paying all their creditors making sure you are the one who shouts the loudest and therefore gets paid first. There is a cost to wind a company of course, but the stat demand is an underused tactic, when most people embark on lengthy county court claims. It is also far more threatening than sending an ordinary letter of claim.

https://www.gov.uk/statutory-demands/forms-to-issue-a-statutory-demand

 

[NYM1]

You do have the option to issue a statutory demand then. This would mean that if they don't pay you within 21 days you would be able to make an application to wind up their company. This is an extremely good method of shocking people into paying, or if they are having troubles paying all their creditors making sure you are the one who shouts the loudest and therefore gets paid first. There is a cost to wind a company of course, but the stat demand is an underused tactic, when most people embark on lengthy county court claims. It is also far more threatening than sending an ordinary letter of claim.

I've never heard of that before ! An excellent link (which I've had to remove so that I could quote your post..) Thank you so much, it might help me sleep a little easier tonight.

 

[internetspaceships]

Or alternatively you pop round and sit and wait till you're seen and THEN ask them to do an online bank payment whilst you're there.

 

[ITsoldUK]

And whatever you do in this instance, make sure in future your first question after reaching an agreement is....what is your chosen method of payment???

Cheque? Excellent, I shall supply AFTER it clears.

JMTC

 

[internetspaceships]

Actually, come to think of it, I think we stopped taking cheques this year.

 

[ITsoldUK]

Actually, come to think of it, I think we stopped taking cheques this year.

Ditto...and I have to say, no-one has even tried to pay in the last 2 yrs with a cheque...not even asked if we accept.

 

[LED Lightworld]

Is your scaffold still up at the property, or have you removed it?

 

[NYM1]

Is your scaffold still up at the property, or have you removed it?

The scaffold structure is still there. We removed the boards from the platforms, but the decorators replaced them to finish their works

 

[LED Lightworld]

Surely that gives you some leverage, they are not going to want the scaffold left up indefinitely. Once the agreed rental time elapses (is it 8 weeks?), you can hit them with the threat of additional rental charges. The more pressure you can apply the better, the thought of their bill going up and up every week might be enough to get them to address the outstanding original bill.

 

[NYM1]

Surely that gives you some leverage, they are not going to want the scaffold left up indefinitely. Once the agreed rental time elapses (is it 8 weeks?), you can hit them with the threat of additional rental charges. The more pressure you can apply the better, the thought of their bill going up and up every week might be enough to get them to address the outstanding original bill.

I wish it did..but we've had a letter from the RTM company today, demanding we ...."remove the scaffold within 7 days failing which, it will be deemed abandoned and they will proceed to put it for sale and the proceeds donated to charity''..

Personally, I think they have a cheek to demand anything of us when they've not paid a penny !

I do realise that anyone reading this thread may be sceptical regarding the non-payment, but I really wish to assure you all that nothing has been untrue in anything I've written.

A very quick summary...

A decorating contractor contacted us to quote for scaffolding works directly to the Management company on a small block of flats to enable re-dec of the external elevations.

Our price was accepted verbally and we commenced works in good faith. ( We never ask for payment before we start works, but as soon as the scaffold is in place, we invoice for the works. ) They paid immediately by cheque. The decorators commenced their works but by the time our bank notified us that the cheque would not clear, most of their works had been completed.

The Management company telephone and apologised. They said it was an oversight in that one of the leaseholders in the flats had not deposited their portion for the contracted costs. Our bank represented the cheque but again it failed to clear. We chose to remove the scaffold boards, effectively rendering the scaffold unusable. (may have been wrong to do that, but still....)

The management company apologised yet again for the 'bouncing' cheque and re-issued another to us and asked us to replace the boards to enable the works to continue. We banked that cheque, but that one didn't clear either. In the mean time, however, the decorators replaced the boards and continued with their works till completed.

Today, we received the letter regarding removing our scaffold or they would sell it and we were also notified by the decorators that their cheque had not cleared either.

When the decorators contacted the company, they were told that the cheque had not been issued by them and it must have been a stolen cheque It wasn't of course. Both cheques issued to us have had the same signature on them and were given to us by one of the representatives of the RTM company.

We are a very small business, there's just me. my husband and two scaffolders that carry out the works. The money owed on this contract represents virtually an entire months income. Without it, I'm not sure how we can continue.

 

[thevaliant]

As you may be aware, the company is a 'right to manage' company which means it is contractually liable to perform the maintenance on a block of flats.

It may, or may not, also own the freehold of the building.

Either way, it going down the pan is VERY bad news for the leaseholders as they will have to get together to form another one. This may cost them more than the £2,500 you are owed.

I'd suggest a word with the current management, threatening to wind them up if they don't pay.

 

[NYM1]

As you may be aware, the company is a 'right to manage' company which means it is contractually liable to perform the maintenance on a block of flats.

It may, or may not, also own the freehold of the building.

Either way, it going down the pan is VERY bad news for the leaseholders as they will have to get together to form another one. This may cost them more than the £2,500 you are owed.

I'd suggest a word with the current management, threatening to wind them up if they don't pay.

You're right in that they 'manage' the block of flats (six flats in total) their registered office is one of those flats. The property is in Hampstead and are currently each valued in excess of £600,000, so these people are not short of money.

I know very little about forming a Limited company, but I've read many times how companies simply cease trading in one name and start operating under a new name within days. Again, I'm not sure, but a quick 'Google' has given plenty of company formation sites that charge in the region of £100. That's considerably less than what they owe us

As they are only a management company, I'm unsure they'll have any assets that can be seized if they don't pay up even with a Summary Judgement...

I think I need to see a Solicitor....I really can't afford to lose this money

 

[Root 66 Woodshop]

If they've agreed for you to provide the scaffold and the decorators have completed their work, then they should obviously by rights pay up.

Personally, I'd be straight over to the property with letters to all the tenants explaining the issues that you're having with their "Management Company" - After all, they'll be paying this company to "Manage" their property won't they?

I'd then happily stand around awaiting for someone to see me, if this didn't happen I'd then be contacting the police informing them of the fraudulent act performed by the RTM.

Surely the tenants would be interested in where their money is being spent and what on... if they're not paying the bills, then surely it could technically fall on all of the tenants, they've put the RTM in place after all.

 

[thevaliant]

You're right about the 'shut down, start up again' element of Companies.

However, RTM companies are very very special.

They are often a named party in the leases of the flats. It may own the freehold. The winding up of this company would spell disaster for the residents as it would mean they all have defective leases (The lease is between Freeholder-Leaseholder with named RTM in it - the loss of this RTM means the lease is defective and needs amending, which will cost EACH resident thousands) and may also have the freehold revert to the Crown meaning maintenance must be done by Liz (and she won't).

Put simply, tell them to pay or else you'll wind them up. They will pay. The cost to them of not is far outweighed by the £2,500 they owe you.

 

[businessfunding]

If they've agreed for you to provide the scaffold and the decorators have completed their work, then they should obviously by rights pay up.

Personally, I'd be straight over to the property with letters to all the tenants explaining the issues that you're having with their "Management Company" - After all, they'll be paying this company to "Manage" their property won't they?

I'd then happily stand around awaiting for someone to see me, if this didn't happen I'd then be contacting the police informing them of the fraudulent act performed by the RTM.

Surely the tenants would be interested in where their money is being spent and what on... if they're not paying the bills, then surely it could technically fall on all of the tenants, they've put the RTM in place after all.

This!

This company are retained by the residents - they have a right to know how they are conducting themselves.

Perhaps a letter in each box with a copy of the bounced cheque?

I really wouldn't take this one on the chin.

 

[NYM1]

You're right about the 'shut down, start up again' element of Companies.

However, RTM companies are very very special.

They are often a named party in the leases of the flats. It may own the freehold. The winding up of this company would spell disaster for the residents as it would mean they all have defective leases (The lease is between Freeholder-Leaseholder with named RTM in it - the loss of this RTM means the lease is defective and needs amending, which will cost EACH resident thousands) and may also have the freehold revert to the Crown meaning maintenance must be done by Liz (and she won't).

Put simply, tell them to pay or else you'll wind them up. They will pay. The cost to them of not is far outweighed by the £2,500 they owe you.

Hi,

Thanks for your comments, it would give me great pleasure to threaten to wind up them up...:redface: I'll have to look into the cost of doing that first though...

I've had a word with a Solicitor today, but to employ them to chase this payment would cost more than I'm owed..at least, she wanted to warn me first ! She did however, give me some advice that will help with the threat of selling our scaffolding unless we collect it within the time scale they've allowed.

Apparently, the RTM would be committing a 'tort of conversion' and civil proceedings can be issued to the individual(s) committing such breech. (I haven't a clue what that all means......:|) just sounds good !

The Cheque Rule can obviously be pursued through the small claims court, but completing the form looks complicated to me.

I really need someone to help with composing a letter outlining the actions I intend to take. I'm rubbish at letter writing...I waffle too much.

 

[chalkie99]

Get as high up the scaffolding as you can and fix a blooming great sign saying

"Scaffolding not removed due to bounced cheques"

Then take away the boards to hinder removal.

Take a couple of photos and leave overnight for a reaction before emailing the local paper.

 

[Nathanto]

I wish it did..but we've had a letter from the RTM company today, demanding we ...."remove the scaffold within 7 days failing which, it will be deemed abandoned and they will proceed to put it for sale and the proceeds donated to charity''..

I've recently had scaffolding up at my place and the T&Cs of the hire agreement are that it won't be taken down (and the hiring period won't end) until the account has been paid in full.

It doesn't help with this situation but may help in the future if you add a similar clause to your own T&Cs.

 

[NYM1]

I've recently had scaffolding up at my place and the T&Cs of the hire agreement are that it won't be taken down (and the hiring period won't end) until the account has been paid in full.

It doesn't help with this situation but may help in the future if you add a similar clause to your own T&Cs.

Hi,

Our T&C's also have the same clause, but this particular company aren't interested in their side of the contractual obligations.

I've sent a letter advising them that if they dispose of our materials it's a 'tort of conversion' We've also explained that unless cleared payment is made within 7 days, we intend to seek Judgement for the dishonoured cheque and will also consider winding up their company.

As they are a RTM company, if we were to petition to wind them up, all tenants are debarred from making another Right to Manage application for a further four years. A consequence of the management reverting to the Landlord is that the value of the flats could drop.

They have no defence for the dishonoured cheque. They have no assets obviously, but the threat of winding them up because they are insolvent may just jolt them into finding some of the funds from somewhere to pay our account.

*fingers crossed*