what to do if a contractor doesnt pay you
In the construction manufacture, contractual relationships betwixt a general contractor and various subcontractors are the norm. It'due south merely the way business organisation is done. The general contractor may not perform whatever work at all on the project and can be seen as more of a manager than anything. Leaving the actual work to be performed by subcontractors, employees, or suppliers. This construction tin become quite complicated on nigh any type of construction project, peculiarly when there is a dispute or failure to pay for work performed. When the contractor refuses to pay the subcontractor, it is up to the subcontractor to protect their legal rights and obligations through a mechanic's lien.
The contract is the basis for any relationship
The basis for any relationship between a general contractor and a subcontractor is the contract and having a detailed and professional person contract is the unmarried virtually important aspect in protecting your right to become paid. Depending on the scope of work and several other factors, this kind of contract can exist quite simple or quite complex, but at its almost basic, information technology should include a description of the work performed and materials to exist used, a timeline that discusses expectations of performance, and a clarification of how much and when the subcontractor should be paid. From there, the subcontractor is responsible for submitting invoices when work is completed. And should the general contractor fail to pay, the subcontractor volition be responsible for protecting the rights afforded under the contract. In the field of mechanic'south liens, the most important consideration are the deadlines under local law, which vary greatly from state to state. A professional subcontractor will know the filing deadlines for a lien and any related documents.
Documentation is central
Documentation is key when trying to enforce any contract, perhaps fifty-fifty more than so in the construction industry. A subcontractor that is organized and professional should exist able to collect and produce all documents related to the work performed speedily, including an authentic accounting of any money owed. This helps anytime a dispute arises and runs parallel to the basic information requirements to file a notice of intent to lien and the lien itself.
Giving information technology One last endeavor to resolve the issue before formal legal proceedings
Before filing any official lien documentation with a court, nonetheless, information technology may be a proficient idea to contact the general contractor to try and resolve the upshot without formal legal proceedings. Sometimes, mistakes happen in complex business relationships and it is possible and when the contractor refuses to pay the subcontractor, it may exist because the subcontractor's invoice merely slipped through a cleft. There are a number of reasonable explanations for a general contractor to non release funds to a subcontractor on time, and you should always examine those reasons earlier filing a lien or related documents. And so if you as a subcontractor take not been paid by the invoice's due appointment, you should kickoff call the full general contractor and ask why. This may resolve the issue quickly, easily, and preserve positive relationships between all parties.
file a notice of intent to lien
If a telephone call or E-mail does not resolve the issue, so you should file a observe of intent to lien or the lien itself. The proper lien filing will depend on your location, the contract, the timeline, and the subcontractor should always know how the system works in their location. These issues are not complicated, just small distinctions can affect your rights and obligations. The most important consideration is any deadlines imposed by your local lien statutes, and y'all absolutely must file your lien documents before whatsoever deadlines pass. Think that your lien filings keep fifty-fifty if y'all are paid after a filing date, so if the general contractor eventually pays you, you must abolish the filings at once.
What happens if the full general contractor continues to refuse payment?
But what happens if the general contractor continues to refuse payment, for any reason. In this situation, and then the filing of a mechanic's lien is the first step in keeping the full general contractor honest. By filing the mechanic's lien, y'all will give notice to all interested parties that there is problem in payment, and notifies all parties that you have performed work, have not been paid, and will pursue payment through a foreclosure or collections suit. In other words, you will put the general contractor and other parties on notice that the project is not living upward to expectations, and legal action that could impact the sale of the property.
Staying On superlative to see it through
This kind of lien may appear intimidating to subcontractors not experienced in the police, at least to start. Generally speaking, Even for experienced in the field information technology can be beneficial to consult an experienced construction attorney. Having an attorney on your side will streamline the process and allow you to focus on your construction projects instead of chasing unpaid bills. An attorney will assist you lot throughout the process, helping you collect the information and documents you need and stay on top of all deadlines.
Having legal support becomes more important when it comes to an unpaid subcontractor and exterior legal problems involving the general contractor. If a lender forecloses on the holding or if the general contractor goes bankrupt, the debt owed to the subcontractor remains, and often, liens are enforceable based on the order in which they are filed. We are happy to provide additional data and guide you through the procedure. A subcontractor should ever exist prepared in case the general contractor refuses payment, and a mechanic'south lien is the legal device used to protect your rights in this regard.
This blog is for educational purposes but and non intended for legal advice.
Source: https://mechanicslien.com/contractor-refuses-to-pay-the-subcontractor/
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