Joint Check AgreementsJoint Check Agreements can keep you moving forward on a jobJoint check agreements are very helpful if you do not have good credit and/or if you don't want to have to worry about paying high material bills before you are paid, or the dollar amount of the material exceeds your credit line. The way Joint Check Agreements work:Usually the subcontractor fill out the agreement and then faxes and/or mails the form to their general contractor who then signs his portion and returns the form to the subcontractor.The subcontractor then sends the agreement to their supplier. The supplier signs their portion and then sends a completely signed copy back to the subcontractor and the subcontractor sends a copy to the general contractor. At this point the subcontractor has an agreement with both the general contractor and the supplier that each time the general contractor issues a payment on the job he will issue the check jointly (a check made out jointly to the subcontractor and the supplier). This check can be for either the whole amount invoiced or just for the balance of material owing (with a 2nd check made out to the subcontractor singularly to make up the balance of the invoice). Sometimes you'll get two checks:Many times the general contractor will issue two checks, one that is a joint check to cover the material and one that isn't which covers the balance of the payment due to the subcontractor.The subcontractor records the check into its accounts receivables, then endorses the back and then mails the check to their supplier to pay for the material expenses. The subcontractor records the second check (which is written only to the subcontractor, not joint) and deposits it into their business account. Ask your supplier if they'll consider a joint check "program"Don't be afraid to ask your supplier if he/she will consider working this way with you. They are protected in that they can (and should) file a preliminary notice on the project, thereby clearing the way to file a lien on a project if the general contractor does not pay timely.We have a joint check agreement available for purchase here.
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