Ashlee Poplin - Contracts, Change Orders and Getting Paid - PODCAST TRANSCRIPT

Editor's note: The following is the transcript of a live interview with Ashlee Poplin of Adams and Reese. You can read the interview below or listen to the podcast.

Intro: Welcome to Roofing Road Trips, the podcast that takes you on a thrilling journey across the world of roofing. From fascinating interviews with roofing experts, to on-the-road adventures, we'll uncover the stories, innovations and challenges that shape the rooftops over our heads. So, fasten your seat belts and join us as we embark on this exciting Roofing Road Trip.

Karen Edwards: Hello and welcome to another episode of Roofing Road Trips from RoofersCoffeeShop. My name's Karen Edwards. And today, we're going to be talking all about construction law and contracts and change orders and getting paid. And I'm really excited that Ashlee Poplin is here from Adams and Reese. Ashlee, welcome.

Ashlee Poplin: Hi. Well, thank you for having me.

Karen Edwards: It's so nice to have you here and this is going to be such an interesting conversation. I'm sure we're going to give a lot of nuggets for folks who are listening. Can you start by just introducing yourself and tell us a little bit about your background?

Ashlee Poplin: Sure. My name is Ashlee Poplin. I am an attorney with Adams and Reese. I'm located in Charlotte, North Carolina. And we cover most of the nation, either through our fiscal locations or the licensures that our attorneys hold. But I particularly practice in the construction law group. And so, I help regularly with contractors, subcontractors and trades, representing them through contract formation, litigation, liens, bonds, sureties, those sorts of things as well.

Karen Edwards: Okay. Now, I know that you are pretty involved with National Women in Roofing. Didn't you help get the Carolinas' Councils up and running?

Ashlee Poplin: Sure. National Women in Roofing, I serve as general counsel for them as well. And so, for anyone who's listening that is not familiar with National Women in Roofing, it's a nonprofit organization. It supports and advances the careers of women roofing professionals. And so, the pillars of that organization are networking, mentoring, education and industry recruitment opportunities. And so, as general counsel for them, I help provide legal advice and guidance, as requested on a variety of issues that may arise within that organization. So, for example, making sure that the organization's compliant with antitrust laws, upholding the bylaws of the organization. And then, I also serve just on the council with the North Carolina, the Charlotte chapter as well.

Karen Edwards: Yeah, that's a great organization. I've been involved with them for a long time and I highly recommend. Anyone can be a member too. You don't have to be a woman in the trades. There's plenty of men and companies that support that organization.

Ashlee Poplin: I agree.

Karen Edwards: So, let's move on to talking about change orders. What's a scenario when a change order would be needed for a project?

Ashlee Poplin: So, a change order is any change in your scope. So, it's going to depend a lot on what your contract reads. So, it's important to review your main contract carefully, so you know what that proper procedure is for preparing and submitting a change order. And then, you'll need to properly follow and document that process. But anytime there is a change affecting your scope of work, the time it's going to take you to complete your work or the amount of money that it's going to take to complete that project, that's when you're going to need a change order.

Karen Edwards: So, it doesn't matter, any kind of change at all? You're going to have to spell that out.

Ashlee Poplin: I always advise on the side of caution there if there's any sort of change, if it is not already built into your contract and written out specifically. So even if, for example, you gave yourself some cushion for weather when you're preparing for your roofing contract and you gave yourself additional time in case there's adverse weather. If there is adverse weather, still document and reflect that in a change order, requesting that additional time because you never know if there's going to be another event that happens that pushes you over what you maybe already factored in yourself.

Ashlee Poplin: So, any type of change that you come up with, you need to document it in written form and submit it. And of course, your contract will determine what needs to be... who needs to sign off on that. But I always advise to have it in a document, a tangible written form, so that if there's ever a disagreement about a change that occurred on the project, whether that be time, scope or cost, you have a written, tangible document that you can go back to and say, "Here's where that change was. Here's where everybody approved of it. And this is how we're going to move forward."

Karen Edwards: So, most likely, I'm guessing, I don't know because I don't use really project management software personally, but I would imagine that a lot of these technologies that contractors are using anyway to manage their projects might have a tool in there or a holding spot, so that the documents can all be together and organized and easily accessible.

Ashlee Poplin: Yes, sometimes. Depending on who you're working with, there may be a document management system, Procore or something like that, that people are using. And you're submitting your change orders through that and they're being approved through that as well. Other times your change order of procedure may be, other than just being spelled out in your contract, there may be an attached addendum that says, "We require that you produce any change orders on this specific form." And so, whatever your contract requires, that's what you're going to want to follow.

Ashlee Poplin: So, if you're required to use a certain software management, job management sort of technology, then you'll need to make sure you're submitting properly through those channels. If you're required to use a specific exhibit, make sure you're properly filling that out and submitting that, not just sending it in on a piece of handwritten paper that you're preparing yourself. This is a situation where you want to cross your T's and dot your I's, make sure you're following the procedure of the contract as it's written, so that your change orders are being upheld and considered valid.

Karen Edwards: So, once it's delivered and potentially signed or acknowledged by the property owner, does it function similar to a contract?

Ashlee Poplin: Yes. So, again, your contract's going to specify the guidelines on how the change order has to be executed. But it's always, in my opinion, best practice to have it signed by all parties. And then, it's going to act as an addendum to that contract.

Ashlee Poplin: So, it's going to modify the terms to include that additional work, time, cost, whatever it is that you've agreed to. And then, it should still incorporate the terms of your original contract. So, it is only modifying that portion that you're creating the change order for.

Ashlee Poplin: So, if the change order is because you need additional time, then it's modifying your contract for the time. And then, you're going to be held to the terms of the change order, which is the new terms of your contract. But all the other provisions of your contract, your original contract, will remain the same. But it will be like an addendum.

Karen Edwards: Okay. So, I'm hearing a recurring theme throughout the conversation so far and that's like, "Everything starts with your contract."

Ashlee Poplin: That's right. That's right.

Karen Edwards: Wouldn't you say?

Ashlee Poplin: That's exactly right. Because things such as change orders and claims procedures are very specific in how they're handled. And you want to make sure you're handling them pursuant to exactly how the contract has it laid out. And you're following those procedures, so that you're not missing any timelines, you're getting things submitted appropriately on the proper forms, so that everything gets checked off and approved quickly.

Karen Edwards: Okay. So, let's talk about another important topic and that is getting paid. And it's a tough situation when you have a customer, who you're waiting for a check. What are some of the things that a contractor can do to help them get paid?

Ashlee Poplin: Sure. Anytime you're in a situation where you haven't been paid, I recommend a procedure that you follow. So, always I would start with follow up by phone call. So, if you have a direct phone line to whoever it is that you're working with, whether it be a homeowner or another contractor, make sure you follow up first by phone, find out what's going on, let them know you've got this outstanding invoice that needs to be paid.

Ashlee Poplin: If you don't get a response from that call, follow up in writing with a written demand. And then, make sure you file a claim of lien in the event that you're still not getting paid. So, a lien is a valuable kind of tool that contractors have that allows you to put a claim, kind of a cloud on title to the property, tying up the property of that homeowner or the owner, who then flows down to the contractor and gives you special rights. That if you are not receiving payment, and you follow the proper claim of lien guidelines, which each state will be different and you get your lien filed timely, you can then force the sale of that property to pay you for any outstanding invoices that you may have.

Ashlee Poplin: And so, often if you're looking at a job where say you're out $10,000, $15,000, that money tends to appear pretty quickly whenever you're threatening the process of taking somebody's property as a result of that. And so, it is a very valuable tool. It's available specifically to contractors, subcontractors and suppliers. And when used appropriately, it can give you some good pressure on those who aren't paying you like they should be.

Karen Edwards: That is interesting because I was under the impression that, if they sold the property, then they wouldn't be able to sell it until that lien was resolved. But I didn't know it could force the sale.

Ashlee Poplin: Yes, you can force a sale. The same scenario you just described also applies. So, these become very helpful and very valuable if you're in a position where the owner that you've performed the work for is in a quick need to sell the property. Say, if it's they're flipping a home or say they're getting ready to be under contract and part of it was to have a new roof put on, then the lien does become much more powerful because then you will get paid out of the proceeds of that sale. But yes. No, you can force the sale of the property through an enforcement of your claim of lien action and then get paid from the proceeds of that sale.

Karen Edwards: Wow, interesting. So, are there things that a contractor should be doing before they even start the job to minimize the risk of not getting paid? What are some recommendations?

Ashlee Poplin: It all starts with your contract, like we've been talking about. Make sure that the terms of your contract are solid, that it has proper payment terms, whether you're going to be charging interest on late payments, whether there are going to be fees incurred for collection efforts and whether those are going to be recoverable.

Ashlee Poplin: For example, a lot of times you'll see and I would suggest including, some sort of attorney's fee provision within your contract, that if you have to pursue collection matters and you end up having to hire counsel to do that for you, that you're entitled to recover the fees that you incurred in collecting. So, you're going to want to set yourself up for success. One, in how your payment is going to be provided to you, have your payment terms be very clear, whether you're able to obtain interest and then whether you're going to be able to pursue collection payments if that becomes an issue.

Karen Edwards: Yeah, this is an important issue. Because if the contractor's not getting paid, they're not able to pay the supplier. So, that can become a big problem for the contractor as well.

Ashlee Poplin: Exactly. Exactly.

Karen Edwards: Wow. So, how about... Gosh, this is almost overwhelming. The contract is so important. And it plays a role in just about everything that happens in your business and your profitability. So, tell me a little bit about how Adams and Reese can help with these contracts. And maybe, even if it's just doing a review or making recommendations, what does that look like?

Ashlee Poplin: Sure, we do that regularly. You can reach out at any time, of course, to myself or any of our construction law attorneys. And we're happy to discuss any issues that may be in your contract. So, we can definitely review your contracts, advise you on provisions that we would suggest including or whether there are provisions in your contract that are not serving you well. Making sure that, depending on what state you're in, that you're including all of those required portions of your contract that are required in certain states. So, certain states require certain disclosures about liens or certain disclosures about financing or whatever may be the case pursuant to what state you're in and also pursuant to what work you're providing or what you're doing.

Ashlee Poplin: And so, those are things that we can give you advice on. We also prepare contracts, customer contracts, subcontracts, sales representative contracts, all of those sorts of things. We prepare those for clients as well to make sure that they have what they need to set them up for success when situations like this arise. Of course, no contract is going to be like an ironclad contract, but there are definitely steps that you can take to put yourself in the best position for success.

Karen Edwards: Wow. Yeah. And you do this every day, right? You're working with contracts and helping contractors on a daily basis. Do you have any favorite success stories?

Ashlee Poplin: We do. And I think one of the best feelings is when you do have the contract and you have a provision, so if somebody's refusing to make a payment to you or they're trying to withhold payment and you had a provision within your contract that specifically takes away the claim that they're making, to be able to say, "Look, here are your initials next to a provision that says the exact opposite of what you're trying to hold me to." And then, being able to shut down a claim very quickly because you had that prepared upfront and you're putting yourself in the best starting position you could be in.

Karen Edwards: Yeah. And there's probably a lot of people that don't read the contract, right?

Ashlee Poplin: Oftentimes, yes. But we're here to do that for you too. I know sometimes they can get cumbersome. They can be lengthy. Sometimes they have a lot of legal terms in them. We are happy to always... Especially if you're a subcontractor, reviewing a contract from a contractor, those can be pretty lengthy. We're happy to read it for you. We understand the terms that are in there, we know what they're doing and mark it up and try to remove the provisions that don't suit you or add provisions to it that will help you. Or, if nothing more, just at least advise you of your risk when signing it. So, I definitely understand why some of these contracts don't get read, because they can be intimidating looking at them sometimes, but we're happy to do that for you as well.

Karen Edwards: Yeah, and understanding, like you said, the terms. Sometimes you start reading this, and a just kind of glazed over look comes up on the faces and yeah, "I don't really know what this means."

Ashlee Poplin: Right.

Karen Edwards: So, you do a good job of translating that into everyday language, I should say?

Ashlee Poplin: Right. Right. That's what we do. We're happy to look at it, tell you what your risk are in signing it, make sure... I would never advise you... If you don't understand it, don't just sign it and hope for the best. Make sure you reach out to an attorney to look at it for you, somebody who understands that language and can tell you whether it's something you should not be signing. Or at least letting you know, like, "Here is the risk you are actually taking if you sign this as is and you don't make any changes."

Ashlee Poplin: I think that's another misconception. A lot of times people think that they don't have a right to make any changes to these contracts, and they either have to sign them or not. But that's not the case. You have an ability to negotiate that contract. And maybe not every provision, but there's a lot more wiggle room than maybe people think. And so, try to make those changes up front so that you're not stuck later being bound by a provision that you didn't understand.

Karen Edwards: Yeah, that's good advice. Because I think, especially in the case if you're working for a larger general contractor and they must know what they're doing, they do this all the time, their contract is their contract.

Ashlee Poplin: Right.

Karen Edwards: But knowing that you do have the ability to negotiate or ask for a change-

Ashlee Poplin: That's right.

Karen Edwards: ... that's important. I mean, obviously you go through and you find and make the recommendations. How does that communication work? Are you communicating with a contractor in that situation? Or are you just telling the roofing sub maybe what to say or do?

Ashlee Poplin: It depends. It depends on what the client wants. Sometimes there will be an attorney on behalf of a contractor or another party, who is also reviewing and negotiating the terms as the changes are being sent back and forth. And sometimes the roofing subcontractor, our client, will want us to work directly with the attorney on behalf of the contractor to take out that middleman process. And then, we can negotiate that contract directly with the attorney or representative of the contractor.

Ashlee Poplin: Because sometimes it does just take a phone call to explain, "Here's the reason why I don't want this provision in the contract," and then to get a creative solution about, "Well, I understand what your position is. What if we add something here? Does that satisfy you?" Those sorts of things.

Ashlee Poplin: And to cut that out, sometimes we will work directly with the other party or the attorney for the other party. But a lot of times, it's just reviewing it with our client and letting them know, "Here are the red line changes that I suggest you submit back." And then, they'll submit them back and see what's accepted and we can advise on risk of what is not accepted.

Karen Edwards: Okay. And the change order process should be spelled out in that contract, right?

Ashlee Poplin: It should, yes.

Karen Edwards: Yeah.

Ashlee Poplin: It always will be. And if it's not, you should make sure you put something in there that spells it out, so you know that everybody's playing by the same rules.

Karen Edwards: On the same page. Wow. Ashlee, thank you so much. This was really-

Ashlee Poplin: Thank you.

Karen Edwards: ... interesting information. And how would somebody get ahold of you, that maybe they want to have you look at their contract?

Ashlee Poplin: Sure, they can send me an email. My email address is ashlee.poplin@arlaw.com. You can also give me a phone call, 704-533-9226. Or you can reach out to me on LinkedIn. You can reach out to me through our firm website, Adams and Reese. Any of those options, you can reach out to me, any of those platforms and I'll get back to you.

Karen Edwards: Excellent. Thank you, Ashlee. And-

Ashlee Poplin: Thank you so much.

Karen Edwards: ... Adams and Reese does have. Adams and Reese does have a full directory on RoofersCoffeeShop as well. So, you can always find that information there. And hopefully, you guys out there learned something today and will take that step to make sure your contracts are buttoned up and protecting you, because that's what they're about. Thanks again, Ashlee.

Ashlee Poplin: [inaudible 00:20:35].

Karen Edwards: It was great to talk with you.

Ashlee Poplin: Thank you. I appreciate it. Always love being on RoofersCoffeeShop. Thanks.

Karen Edwards: Thank you, everyone out there, for listening to this episode of Roofing Road Trips. Be sure to follow us on social media. We don't want you to miss a thing. And we hope to see you again on a future episode.

Outro: If you've enjoyed the ride, don't forget to hit that subscribe button and join us on every roofing adventure. Make sure to visit rooferscoffeeshop.com to learn more. Thanks for tuning in, and we'll catch you on the next Roofing Road Trip.