Can you sue subcontractor

Can you sue subcontractor

Rental Property Investor · Streetman, TX · Member since 2018 · 527 posts · 495 votes

I have an issue with a GC on a remodeling job. He has abandoned the job unfinished and refuses to answer phone calls, txt or emails for over a month now. I sent him certified mail terminating contract for default. I have also filed a claim in small claims court to recover what I have paid him already. Likelihood of recovery is very low. I hear GC has three other jobs in a similar abandoned state as mine.

I have tracked down the subcontractors independent of GC. The plumber is owed funds by the GC. After negotiations he has agreed to complete the job if I agreed to cover what he is owed by GC. The plumber and I now have a new contract. I will pay what he is owed by GC plus add on to fix what GC has done. GC cut waterlines in the slab so we need to run all new lines.

I also tracked down the electrician. Turns out electrician is a relative of the GC. At first he denied he was connected to the job. Then I pointed out he is listed on the building permit that was part of the original contract. That refreshed his memory. He now admits the GC owes him money too. The electrical is roughed in and passed inspection. We updated electrical device and he needs to bring power in from the pole to the new panel and wire outlets, switches etc. I made him the same offer as the plumber. Finish the job and I will pay what is owed by GC. He is refusing to finish and not cooperating.

My question is can I sue the subcontractor in Texas small claims court? He has more at stake than GC. He is an established business, state licensed and Google and Yelp Business profiles.

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Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
5y

@Pete Harper Not successfully....you have no contract. Your only possible recourse is with the GC. 

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  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    5y

    Keep in mind in Texas contractors do NOT need to be licensed nor bonded and insured.  My guess is this contractor has none of these.  While Pete may very well get a judgement he is aware his likelihood of collecting is very very low  In Texas, we cannot garnish wages nor attach a lien to a homestead and the chances this contractor owns non exempt property is low at best

    What do you think @Mike Reynolds?

  • Rental Property Investor · Austin, TX · Member since 2021 · 36 posts · 28 votes
    5y

    @Pete Harper I think you have a good case and should pursue. However, my comment for you is regarding other subs. I would make sure you know all the subs that could have been on the job, if they were also not paid they can put a lien on your property for non payment even if you had paid the GC already unless there was something in your contract about receiving a lien release at every payment. I would ask the plumber you are back in good terms with if he was aware of any other parties that had been on the job. The good news is I am pretty sure in Texas parties only have a certain amount of time to file the lien so once you are over that deadline you are in the clear. Worth looking up. Good luck.

  • Rental Property Investor · Streetman, TX · Member since 2018 · 527 posts · 495 votes
    5y

    @Daniel Smyth I’m using the courts as intended. I paid for a service and the GC and SC defaulted. How is that making a profit?

  • Rental Property Investor · Streetman, TX · Member since 2018 · 527 posts · 495 votes
    5y

    @April Clark Yes, I’m aware that subs can sue me for nonpayment by the GC. That is exactly why I reached out to them independent from the GC. I will have the plumber sign a release at the end of the job. The electrician didn’t want to cooperate. I now have documentation showing I attempted to settle his claim should he ever take me to court.

  • Rental Property Investor · Big Sandy, TN · Member since 2013 · 147 posts · 91 votes
    5y

    Check to see if the prime / gc is bonded. If so you can contact their bonding company. It is essentially insurance against this. 

  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    5y
    Originally posted by @Greg H.:

    Keep in mind in Texas contractors do NOT need to be licensed nor bonded and insured.  My guess is this contractor has none of these.  While Pete may very well get a judgement he is aware his likelihood of collecting is very very low  In Texas, we cannot garnish wages nor attach a lien to a homestead and the chances this contractor owns non exempt property is low at best

    What do you think @Mike Reynolds?

     Greg is pretty much correct. Some cities do require a token license and a token bond. The bond is usually 5-10k though. I have never built anything in the Streetman/ Fairfield area(if that is where we are talking about) so I can't say for your job. 

    what I would do is go to the code dept and ask them if they require a bond. If you have to call a bond that alone may get them to finish. He won't be able to get a bond if they pay out unless he covers nearly the whole amount next time. Often they can convince him to finish. 

    Of course that assumes they do require one. The liability could cover you on the other stuff. 

    Mostly though if you want to finish you just need to do what it takes to make that happen. What you offered the plumber and electrician was the right thing to do. Unless I missed it, I didn't see anything on the AC guy. Is he ok the permit too?

  • Rental Property Investor · Streetman, TX · Member since 2018 · 527 posts · 495 votes
    5y

    @Mike Reynolds You are correct. Contractor is not licensed or bonded. Neither are required in Texas. Fairfield is super small market. The city doesn’t have an inspector. Inspector is coming out of Dallas. Private firm. I’ve contacted the inspector and advised him of the situation. He is going to work with me on finishing the project.

    AC was never started so there is no sub. The GC told me he purchased the units but I’ve never seen them. I asked to see invoices and he refused. I asked to come get the units and have them installed myself. Shortly after this conversation he stopped communicating altogether. I’m sure the GC was lying. I’ve hired a licensed AC contractor who started today.

    The plumber starts next week to finish the plumbing.

    I filed in small claims court against the GC on Monday. He will be served the papers by the sheriffs office this week. When I dropped off the paperwork the sheriff was familiar with him. I’ve since learned there are three other projects in a similar situation as mine. One is worth over $200k. The GC has burned through a pile of cash in the last six months.

  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    5y
    Originally posted by @Pete Harper:

    @Mike Reynolds You are correct. Contractor is not licensed or bonded. Neither are required in Texas. Fairfield is super small market. The city doesn’t have an inspector. Inspector is coming out of Dallas. Private firm. I’ve contacted the inspector and advised him of the situation. He is going to work with me on finishing the project.

    AC was never started so there is no sub. The GC told me he purchased the units but I’ve never seen them. I asked to see invoices and he refused. I asked to come get the units and have them installed myself. Shortly after this conversation he stopped communicating altogether. I’m sure the GC was lying. I’ve hired a licensed AC contractor who started today.

    The plumber starts next week to finish the plumbing.

    I filed in small claims court against the GC on Monday. He will be served the papers by the sheriffs office this week. When I dropped off the paperwork the sheriff was familiar with him. I’ve since learned there are three other projects in a similar situation as mine. One is worth over $200k. The GC has burned through a pile of cash in the last six months.

     The liability insurance could be touch and go unless you are named as "other insured". Next time ask for a copy from his insurance that names you other insured. 

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