Credit Details

The purpose of escrow accounts is to establish credit for a homeowner or builder for a single project where payment to Paramont EO/Crest Lighting will be made directly by a third party escrow agency. This agency may be a title company, attorney, bank or other acceptable party.

The dollar amount approved for credit can be set up for the entire amount of the order (less deposits as required for special-ordered material) or for an allowance as set up by the builder.

Each escrow account project is separate and distinct, and will require a separate escrow application form (Request For Escrow Job Approval). This application form is available in any of our Crest locations, or by fax (630-783-8178) and may also be downloaded from our website in the next section, which also contains a step-by-step procedure for opening an escrow account.

If you are interested in establishing an escrow account, please complete the following steps:

In order to set up an escrow account you must first add Paramont EO / Crest Lighting to the Contractor’s Affidavit (also known as the sworn statement) with the escrow agency. You should also inform and authorize the escrow agency to make payments directly to Paramont EO/Crest Lighting. (See * below if no affidavit has been submitted)

Once this has been done, complete the Request for Escrow Job Approval application, which is available in any of our Crest locations or in our Credit Department (located at 1000 Davey Road, Ste. 100, Woodridge, IL 60517; P: 708-345-0000 F:630-783-8178). You may also download it here.

Complete all but the section marked For Office Use Only, and mail, deliver or fax the signed application to our Credit department. You may also return the application to any of our branch locations, where it will be forwarded to Credit. For quickest response, send directly to Credit.

To prevent any delays, it is very important that this form be completely filled out, with fax and phone numbers and your signature (authorizing us to contact the escrow agency, and signifying your agreement to our selling terms).

Your account will be set up as soon as we receive the escrow agency’s confirmation that we are properly listed on the Contractor’s Affidavit.

Historically, approval can be as quick as the same day, but possibly could take several days if the escrow company is tardy in responding to our requests. Generally, we will contact them the same day, or at the latest, the day following receipt of your request. Some escrow agencies are very responsive, though there are some who treat this kind of request as an unwanted intrusion on their valuable time. If you are in a hurry for credit approval, let the escrow agency know that it is important to return our request as soon as possible. Between your efforts, and our persistence, they will eventually cooperate.

* One potential roadblock is if the project is extremely new, and no affidavits have yet been submitted to the escrow agency. Because it will not be possible to confirm our presence on the affidavit, the remedy for this situation is for you to send a letter to the escrow agency, with a copy to us, advising them that Paramont EO / Crest Lighting will be listed on a forthcoming affidavit. The following statement is usually sufficient:

“Dear Title Company, Please be advised that Paramont EO / Crest Lighting will be listed for $______ (amount requested) on the next contractor’s affidavit.”

They really are busy, in most cases, with a lot of files. So make sure the property address and escrow number are referenced somewhere on your letter.

We gladly provide waivers of lien for payment, whether you just want a standard partial or final waiver on our own forms, which are acceptable to most title companies and owners. We’ll also execute contractor’s affidavits (CT&T and others), CDB waivers, out of state waivers (if applicable) and will consider specially worded waivers as well. If, after payment, you require a waiver you may either contact our Credit department by phone, or use our on-line request form in the next section of our website. If you have questions about types of waivers, please read the following.

The Illinois Mechanics Lien Act states that the owner of the property under construction or improvement must require, and the contractor must produce, a sworn affidavit listing the subcontractors and their suppliers, and the amount owing to each.

In a strict sense, a waiver is not required by the lien statutes, but use of waivers has become the generally accepted procedure for an owner or owner’s agent to determine that the contractors have paid their subcontractors and the subcontractors have paid their suppliers. The lien law does not require that a materialman’s suppliers be listed, therefore waivers are rarely required of the suppliers’ vendors or OEM’s.

A waiver states on its face that the undersigned has actually received payment, and therefore, waives all or part of its rights to file a mechanics lien on the property. Sometimes this creates a dilemma, especially since some contractors require that the document be submitted prior to actual payment. Section 60/21.02 of the lien law deals with this issue, but care should be taken before furnishing a waiver prior to receipt of actual payment.
There are several types of waivers that are commonly used in Illinois:

A partial waiver of lien is used on a project that will have multiple payouts (also called ‘draws’) during the course of the job. This waiver is submitted for all but the final payment. This form is not always notarized.

A final waiver of lien is the waiver submitted for the final draw.

A conditional waiver may be either a partial or final waiver. The difference being that the waiver contains language that states that payment has not actually been received, and that rights are retained until receipt of actual payment. This is a less common waiver, although some owners and escrow agents accept them, but only on the condition that they subsequently make direct payment to the issuer of the waiver. This is probably the most fair way to handle waivers, but alas, is rarely used.

The Chicago Title (aka CT&T) waiver, as it is known, is a contractor’s affidavit on a form produced by this specific title company. It can be a partial waiver (which may be on pink colored paper) or final waiver (blue). There are multiple versions floating around, some issued by rival title companies, all of which are similar in scope, nature and language. The most specific traits they have in common is that they are a two-part document, with the top part containing stating how much the issuer is waiving, with the bottom part listing subcontractors and the amounts paid and still remaining to be paid to each. The partial and final waivers discussed under #’s 1 & 2 above usually contain the same language as the top part of this form. A Chicago Title waiver must be notarized.

The State of Illinois Capital Development Board waiver. This is a specially designed waiver, generated by the CDB for their specific contracts. They may be partial or final, and the language is very similar, with two primary differences. First, the language specifies you are releasing your rights to lien the public funds or bonds, rather than a piece of real estate. The second difference is that the document has a section for attestation by the Secretary of the Corporation of the signer.

Other specially designed waivers that occasionally crop up. Some job owners write their own waivers, often adding odds or ends that their attorneys dream up, like indemnification clauses. As a supplier, we don’t agree to indemnification clauses in these waivers, and usually strike out this kind of verbiage, or we simply furnish our own waivers instead.

Waivers and waiver strategies are discussed in more detail in tips and tools.

For sales of product that will be incorporated as permanent improvements in a construction or remodeling project, it is important that the address of the property be listed on the invoice for several reasons:

Job information enables us to confirm waiver requests. It is not uncommon for a General Contractor or Title Company to call asking us to confirm the information on our waivers. Since we are attesting to these purchases on a legal document, we need to be sure we are accurate.

Many customers demand job information to do job-costing, or need it to identify the project manager who would approve the invoice for payment. It is easier to simply provide the information across the board, rather than try to keep track of who does it one way (Purchase order #’s, for example), and those who do it another way.

Job information is necessary for when you have problems collecting on a job, and request our help in putting pressure on the General Contractor or Owner. The first thing they or their attorney will demand are copies of the invoices to confirm that the material was incorporated into their job. If the invoices are not specifically marked, it raises the chance that they may challenge our claim, and may reduce the pressure we can help put on them on your behalf.

We feel this policy benefits you. Our order takers are directed to obtain this information on all orders for all customers. We feel every credit sale we have is an affirmation of our trust in you. If you wish to discuss this policy, please feel free to contact our Credit Manager, Norman Cowie, at (708) 293-2801.

A unique and helpful tool for tracking larger or critical jobs is the job account. For a customer who has a credit account with us, the job account can be used to approve credit for a single project; and is usually assigned its own separate account number. A single customer may have multiple job accounts, along with their primary account. Because a separate account number is established, a separate statement is sent monthly for the primary and each job account. Credit terms and conditions established for the primary account extends to all job accounts.

There are several good reasons for setting up a job account:

First of all, sales for the approved job will not affect the credit limit for your main (aka primary or shop) account. Although credit established for you under the job account is an extension of your original account, higher limits are available for specific projects. We also review your primary account’s limit from time to time, occasionally adjusting your limit to take into account changes in your credit needs. A job account also enables us to approve a higher limit than may have been established for your shop account.

Another very important factor in approving a job account, is that we will investigate the credit worthiness of the general contractor and/or owner. We will screen the major players through our own data base; and will not hesitate to pull public record bulletins or D&B reports to further evaluate the general contractors or owners. We will forward whatever we find to you, so that you have a better picture of the persons you are subcontracted with. All this at no additional expense to you.

A job account makes job-costing much easier for you. Each invoice will be readily and conveniently marked, making it easier for you to know and calculate your material expenditures for each job. Statements and payments are also more easily provided should you need them, also allowing for more prompt calculation and approval of waiver requests.

Another critical use for a job account is for the approval of a project where there is added risk, for one reason or another. Let’s say that the general contractor has a long rap sheet of suits and liens against him. Or a previous contractor was kicked off the job, and you are being asked to take over amid conflicting stories about the breakup, or perhaps liens are being filed against the property by the previous contractor. If you still desire this project, knowing up front the risks, a job account is a valuable instrument to quickly identifying and responding should it first begin to go South. Oftentimes, it’s a good idea to examine the possibility of obtaining a joint check agreement up front on a project like this, where the general contract agrees to Paramont EO’s terms and conditions.

A job account may be an option if you are a newer company, and you landed a large project, but cannot yet demonstrate the solvency necessary for approving the project. In a case like this, we can explore approving the project with a joint check agreement with the general contractor. The general contractor benefits from this arrangement, because they know your suppliers will be paid (by paying for the material directly with a joint check), Paramont EO benefits in that we have additional protection (allowing us the freedom and comfort in approving higher limits), and you benefit since the means have been provided to obtain the materials necessary to complete the project.

If the worst happens, and a job goes sour, the job account is one of the best tools for effecting remedy. Since all invoices for the project are under a single account, it is far easier to quickly and efficiently organize the file for quick response should it be necessary to take action against the property.

Approval of a job account is quick and easy. You simply fully complete a Job Information form, and fax it to the Credit Department at (630) 783-8178. Approval is streamlined for a quick response. You can obtain the Job Information form on this website (next section), or through our salespeople, or feel free to contact our Credit Department at (708) 345-0000.

The information on our website is meant to provide a means for introducing you to Paramont EO, our products and services, and the general guidelines to obtaining the credit accommodations you need to best suit your needs and requirements.

We try to go beyond this, though, and share with you resources and strategies that may help you in your own business endeavors. Nothing contained herein was written by, reviewed by, endorsed by, or otherwise contributed to by an attorney. I am not, do not want to be, do not pretend to be, nor even on Halloween dress up as an attorney. Do not take my advice over that of your own attorney (even if I’m right).Also, since the majority of our business is in Illinois, all of the strategies and lien concepts discussed here will solely based on the lien laws of Illinois. It’s important to understand that each and every state has its own lien laws, all modeled after the national Miller Act, though with sometimes drastically varying rules and procedures.

That said, I’m a battle-scarred veteran of the industry, and have had my share of tussles with almost everything in the Illinois Mechanics Lien Act. I’ve also authored articles on the subject of liens and construction law, and spoken in various seminars as well. Even so, I still get surprised on occasion.

I hope the following tips and tools prove helpful to you.

Norman Cowie, CCE