Sub-Contractors Lein on house

1 Reply

I am in an interesting scenario where my contractor has not paid one of his subs. I received a letter from a sub making me aware of the situation and they are threatening to file a lien on the property. 

The situation gets interesting because although the property that this lien could be filed on is complete, and my contractor paid in full, I have him working on two other houses at the moment that he has not completed and I have not paid him in full. I have carefully documented all payments, but never received a release of lein from him or his subs. I can probably get a release of lein from him, but that won't protect me from his subs trying to collect.

 I don't believe I have any real legal recourse to withhold the money from him because we are now on a separate project. I am pretty sure he doesn't have enough money to pay the sub at this time.

Does anyone have any ideas on how to move forward?

Thanks!

Here in California sub contractors have to file a Preliminary 20 day Lien notice within 20 days of starting their work on the project. See if that is the case in your state. Also, your GC should receive lien releases each with each progress payment he gives to his subs. Ask him about those. How long has the project been complete? Again, here in California, the subs have 90 days from completion to file a lien. It's reduced to 30 for subs (60 for prime contractors) if you filed a notice of completion with the county.

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