Contractor Sub Question

[Greatwhitewing]

Try to be brief and complete. Please no coulda/shoulda.

Signed a contract with GC with milestone/progress payments spelled out.
One milestone being completed framing (structural), rough electrical, rough plumbing and insulation complete which means passed inspection and he got paid.

GC hired subs and never paid some then abandoned the job. I tried to contact subs for months and couldn't get a reply. Write letter to town saying so and get new overall permit to finish in my name.

Now plumbing sub turns up and wants to recover all his costs or submit a contractor lien to complete finish plumbing work. I am trying to work with him and come to an agreement but I want to know where I stand.

The way I see it I already paid for rough install and materials and the GC owes him.

It's not out of the question I am being scammed since he told me the GC paid him by the day and GC bought materials on credit he now defaulted on. They may be related remotely. Suing the GC would be unproductive, long line ahead of me and I pretty much got what contract said. Was a good reliable GC but went bad recently for some reason. A friend in the bizz recommended him.

I am planning on getting legal advice but I also wanted to hear from real people.

 

[ConCretin]

The bad news is that subcontractors are entitled to lien your property for the value of labor and materials used to improve your property even if you already paid the GC. Lien law seems arcane to those unfamiliar with it but it has been around a long time. It varies a bit from state to state but the basics generally apply. You'll likely have to pay all subs and suppliers who the GC didn't.

If it makes you feel any better, there probably isn't much you could have done (other than pick an honest contractor but that's hard to know). Savvy owners will require lien waivers from all lower tier subs and suppliers covered in a previous payment before making a subsequent one. This limits your risk but unless you have a contractor willing and able to pay the bills before you pay him, lien waivers generally lag.

Sorry you are having to deal with this. Civil action might be your only option unless there is a bond in place.

 

[jkuro]

X2, you need lien waivers.

 

[B.Y]

In some states a Contractor filing a lien / mechanics lien must follow very specific guidelines that dictate timelines.
First, I would look up what those are in your state as the sub may have already missed the criteria, disqualifying himself.


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[SamuraiJack]

Your best bet would be to talk to someone with specific legal knowledge of lien laws. In WI once the sub is off the job they have 6 months to file an intent to lien and then 30 days to file a lien after that. So depending on the dates you may be in the clear like B.Y said.

 

[MattN03]

I acted as the GC on our home addition/remodel recently. Our bank would give us draws to pay contractors direct. Whenever I wrote them a check, they picked it up personally from me, and at the same time they completed two bank forms stating they'd been paid in full for all work/material performed and they could not put a lien on the property. I would definitely have something like this as you deal with the subs. Good luck, it can be a frustrating process of finding good trades...

 

[dcg9381]

X2, you need lien waivers.

Retrospectively, this.

I had a buddy in the same situation here. He found a good attorney that threw rocks at contractors that tried to lien and didn't follow process. He also settled with several contractors.

Whole industry is a crock.. When a sub hires a sub, bad stuff happens.

 

[Professor Fate]

As has been stated you really need to verify the timelines in the lien law and whether or not a sub has filed a Notice To Owner. The law is very specific and my guess is the plumber is too late and out of luck, but is hoping that you don't know the law. Contact a lawyer.

 

[Innovate1]

A little different situation but I had a contractor doing poor work and fired them. They had gotten partial payment but filed a lien. The conditions for filing a lien are very loose here requiring virtually no documentation. Forget exactly what I ended up doing but I resisted and he eventually gave up and pulled the lien. Like others have said, the plumber is probably thinking the threat of a lien will scare you. You need to find out exactly what the rules are as there are usually penalties for filing a lien falsely or without the proper documentation. Then there is the trouble of going through all the steps of collecting so depending on the amount it may not be worth their trouble trying to collect. You should be able to look up the rules on liens yourself or may want to get some legal advice.

Recalling some details... There is little documentation needed to file a lien here but they are required to notify. As I recall they didn't notify me and that is how I ended up getting them to pull their lien. Think I called the county office that handles liens as I suspected he would try to file and that's how I found out there was one.

 

[Greatwhitewing]

So I looked at the rules and it looks like he has 90 days from last work or material delivery. It's about 60 days now so might be all of a sudden he contacts me.

To get another plumber to finish was 1200 so that's what I offered and he countered with 1500. I don't like being threatened but for $300 might be easier route if he signs a waiver.

But still want to talk to a lawyer.

Thanks guys, you've been helpful

 

[Pike2350]

One thing you may want to check is if your state has some sort of protection/insurance policy for liens. In UT (they may be doing away with this, or so I've heard) there is protection for homeowners for this very process. It's a lien recovery fund or something.

In UT, you have your timeline, but there is also the contract signed with a licensed GC. If you have a signed contract with a licensed GC (in good standing with the state) and a sub files a mechanics lien on the property, you have the ability to file a claim with the lien recovery act. If you can prove you paid the GC and that it was within the scope of the contract and for the work/material that is being filed by the sub, the state will step in and try and figure it out. It is a long process, but it does help to protect the homeowner from this kind of shady behavior.

The last place I worked had a similar situation. The homeowner hired a contractor to do the work. The GC subbed the tile work to my work. We were never paid by the GC due to some personal issues and bad management (He was too inexperienced in running his own business and thought he could do it because he was a superintendent for a major construction outfit).

We had no choice but to file a lien on the property to try and recover the $10k we were owed. The homeowner had fired the GC for poor quality in other parts of the job....but they refused to work with us due to having already paid the GC. The homeowner worked with the state lien recovery fund and when I left, the process was still going 2 years later. It's slow, but last I heard, we were eventually compensated by the fund and the GC faced fines and legal action.

 

[Git]

So I looked at the rules and it looks like he has 90 days from last work or material delivery. It's about 60 days now so might be all of a sudden he contacts me.

To get another plumber to finish was 1200 so that's what I offered and he countered with 1500. I don't like being threatened but for $300 might be easier route if he signs a waiver.

But still want to talk to a lawyer.

Thanks guys, you've been helpful

Does your state have a Preliminary Notice law like California has?

"A subcontractor or supplier can give you the Preliminary Notice before delivering supplies or starting work and up to 20 days after delivering supplies or starting work. If the notice is later, the subcontractor or supplier is only entitled to foreclose a lien to recover payments owed 20 days before receipt of the notice and anytime thereafter"

 

[Innovate1]

I am a little unclear on where things stand. Is the plumber claiming you own him for work he has already done? Of is he demanding that you use him for the finish plumbing that is yet to be done? If it is the second case, since you don't have a contract with the sub and he hasn't placed any parts or done any labor for that part I would say you aren't obligated in the least. But that's just a quick, fairly uninformed opinion...

You say he wants to recover his costs but will settle for doing the finish plumbing for not much more than other bids for that piece of work? Confused...

 

[Greatwhitewing]

I am a little unclear on where things stand. Is the plumber claiming you own him for work he has already done? Of is he demanding that you use him for the finish plumbing that is yet to be done? If it is the second case, since you don't have a contract with the sub and he hasn't placed any parts or done any labor for that part I would say you aren't obligated in the least. But that's just a quick, fairly uninformed opinion...

You say he wants to recover his costs but will settle for doing the finish plumbing for not much more than other bids for that piece of work? Confused...

The quote I mentioned was for a new plumber to inherit someone elses work and be on the hook for. I assume they pad for risk especially since it's a 30-50 employee operation with some business savvy. The old plumber mentioned the money owed him by original GC specifically in the conversation about cost. Finish work has little or no materials, mostly labor to connect 2 sinks, GB disposal, shower and a toilet.