private investment note

[Akoto]

I've been doing some under-the-table construction work for a guy since the beginning of the summer. I will ask him a few days in advance for some money and I'll email him my hours worked, then he just hands me a check. I'm not an official employee (never filled out a TD1 form), nor do I pay taxes or workmens comp or anything.

I finished a job for him a few months ago and let the hours build up quite a bit before I asked him for some money.

When I did, the ammount was about $1500. He told me that he was a bit short for cash at the moment, and having discussed investing in his proporties a few times before, he asked if I would consider simply investing this money back into him, at a rate of 6.5%.

I agreed, and have been working for him since on another project. I was told by my parents to ask for a notarised contract, and have asked him for this several times now and have always gotten a "OK, I'll talk to my buisness partner".

Now, it's very unlikely that he would be trying to rip me off because not only do I know a number of his friends, but he is heavily invested in a number of proporties in the area, and his buisness partner so happens to also be my moms boss, who works for one of his other three major projects. They are simply too heavily invested to just run away with my measly 1500.


My question is this: Should I demand a notarised contract of my amount invested, amount returned, and return date with my next paycheque? Or should I accept what he called a note or return (he seems quite reluctant to get it notarised, even tho I offered to do so with my neighbor who happens to be a lawer)? OR Should I just ask for my money in full or in installments?

 

[Banquo]

When I did, the ammount was about $1500. He told me that he was a bit short for cash at the moment, and having discussed investing in his proporties a few times before, he asked if I would consider simply investing this money back into him, at a rate of 6.5%.

I agreed, and have been working for him since on another project. I was told by my parents to ask for a notarised contract, and have asked him for this several times now and have always gotten a "OK, I'll talk to my buisness partner".

Now, it's very unlikely that he would be trying to rip me off because not only do I know a number of his friends, but he is heavily invested in a number of proporties in the area, and his buisness partner so happens to also be my moms boss, who works for one of his other three major projects. They are simply too heavily invested to just run away with my measly 1500.

A general rule of handling business is to not mix it with friend or family issues. The fact that he may be short on money is not your problem. Don't let him make it your problem. If you think pushing back on him might get your mom in trouble, then that's something you should consider carefully. It seems extremely unprofessional for someone to not pay you for services rendered, especially since you had an agreement with him. Verbal work agreements are usually binding (though harder to prove, obviously). It sounds like he breached the understanding you had with him.

My question is this: Should I demand a notarised contract of my amount invested, amount returned, and return date with my next paycheque? Or should I accept what he called a note or return (he seems quite reluctant to get it notarised, even tho I offered to do so with my neighbor who happens to be a lawer)? OR Should I just ask for my money in full or in installments?

What's a "note of return"? Signature, date, amount owed, date due, and reasonable interest stipulations sound like the most important things to reduce to writing. Also, if you have a secured interest in a property, it might be a requirement under your state's law, that such an agreement be in writing in order to be valid. I think you should definitely get something signed by him. $1500 is not a small amount of money for most people.

Even with a written agreement, you should also consider the cost of pursuing a collection action against him if he defaults on payment again. This can be expensive and time-consuming. I wouldn't let payments get too far past due for this reason. If he or his property company are in bad enough financial trouble, you could end up as a bankruptcy creditor, getting pennies on the dollar.

 

[MahanAtma]

You have a problem with the taxes. Even if you had a written contract, neither of you is in a position to enforce it, because you are both evading income taxes. You can't very well take such a contract to a judge in that situation; even if it were written up as a simple promissory note without any reference to your employment, the truth is bound to come out.

And my guess is that your employer will refuse to reduce it to writing for this reason.

I can't advise you to do something illegal, like entering into an employment situation that involves tax evasion. But taxes aside (i.e. assuming you would pay them yourself), I would strongly advise you to get the cash ASAP and not run up a big bill with him if you're not going to enter into a formal employment arrangement of some kind.

 

[Banquo]

yeah...i should have qualified what i said with: assuming you pay taxes on it when you file next year.