Just looking for thoughts on how you would handle the following situation.
You’ve hired a gc for a 50k project which turns into a 100k project. You pay them by installments. The work is finished in February 07. Time goes by and in September 07 the subtrade plumber who finished his portion of the work in October 06 – almost 11 months prior – tells you that the gc hasn’t payed him the full amount. Plumber is owed ~10k.
The gc isn’t bankrupt, also the plumber and the gc are ~friends and have been working with each other for years and the plumber has had problems collecting from the gc in the past. Plumber has left many phone calls that have been unreturned by gc.
Thanks for any thoughts.
Replies
You hire an attorney IMMEDIATELY as the next steps those subs are going to take is to file a lien oin your property! Liens differ from state to state but that is what normally happens.
Also if you job was permitted by the local building dept., file a complaint with them.
And one or two other things:
Are you sure the plumber is not trying to just get extra cash out of you? Usually any lien or monetary claim right expire after a year. Why did he wait so long?
You did pay for the job in full to the GC right?
Plumber's story was that the gc was the go to guy and he had worked with him before. I think in general subtrades who want to remain in the employ of the gc would be foolish to go around them except as a last resort - just as each trade is very reluctant to point out poor workmanship in another trade on the same job for fear of being blacklisted I think they are equally fearful of being blacklisted by gcs.I think it basically comes down to bad management on the part of the plumber, he figured he would get paid so didn't get on the gc as quick as he should have for an amount of this size. Plumber was also doing multiple jobs for the gc, the gc paid him some money, but the plumber is unsure of which project the money paid should be credited against as the money wasn't paid against a particular bill the plumber had given the gc.I think the plumber is an honest guy and I am having him put a kitchette into my basement and would like to continue working with him in the future. Talking to him he seems reasonable but he seems to think I should have held back more money until a certain time after the contruction was finished but I think that give the project has been completed since February I would have given the held back money back to the gc sooner than now as I haven't heard anything about people not being paid. I am up in Canada so the legal requirements are different here but from what I can tell it breaks down something like: a trade has 45 days after completion of his work to file a lein against the property and then 1 year in which to follow up on the lein or sue to get the money/lien enforced. In this case the trade is way past the 45 days and it is almost a full year after the work was completed. So from a legal perspective I think things are ok for me.Now if the gc ends up not paying, ignoring legal requirements, what would you think would be a fair resolution given he and I both want to maintain working ties in the future. Thanks for any thoughts.
(This is not legal advice as I'm not a lawyer) "I think the plumber is an honest guy and I am having him put a kitchette into my basement and would like to continue working with him in the future."Be careful because here in Louisiana if I re-hire a sub on the same job he can claim that this is on going work from the first contract (i.e. change order) and that will void the 60 days he has to file a lien. I always get a lien re-lease from all subs that I use and I also give a copy of the subs lien re-lease to my customer upon final payment along with a signed lien re-lease from my company showing that I've paid all subs and suppliers.Alos if the contractor you use is not willing to give you a lien re-lease I would hold off paying him/her until they give you one.They had a roofer down here a few years back that did over a hundred roofs in several months and he never paid his supplier. The supplier was able to go after the homeowners for the money and the homeowners had to pay twice for the materials. They never did catch this guy because he was from out of town, came here when we had a big hail storm. busta
Good advice about the new work. The new work is in a different house as the initial project was in a rental property. A lien re-lease sounds like a good thing to get from a gc. I'll keep that in mind for next time. Thanks for the reply.
At this point I would just wait and see what happens, the plumber, as many subs unfortunately are, is not a good businessman, that is not your problem ( if he has no legal recourse). For the future the general procedure to follow on a project of any decent size is this ( in The States): You (owner) receive a schedule of values from the GC This is a breakdown of the project by trade, labor and material with all subs and suppliers listed (usually for items 500 or more). This is the basis for your progress payments to the GC. After the first payment all subsequent payments require a partial waiver of lien from subs and suppliers. If the first payment is for over 50% of the project partial waivers are required for the first payment. Prior to the last payment to the GC final waivers of lien are required for all listed subs and suppliers. Retainage may or maynot be held from the partial payments. Because the above can be manipulated often alternatively or in addition on most commerical and Government projects a payment bond can be required, this protects subs and suppliers. These are not easy to get as the GC must have substantial assets and experience. The whole process is difficult and a burden for the GC (I was a GC for 25 years). It does usually protect the subs from their own incompetence in the business world.
This sounds like good advice and I'll definitely be a lot more stringent on setting up the details on the next job that I have done for me. I think the problem is that I relied too much on the GC to really handle the project and it turns out he wasn't really up to the task or he didn't care enough to perform the task properly. The problem is that finding a GC that does a good job and is willing to put up with the burden that you described is a hard task. Having delt with the previous GC I wouldn't deal with him again as I ended up having to manage a lot more of the process than I wanted or expected.Thanks for the post!
Step one is to get a lawyer who knows the scoop.
We had a contractor go bankrupt building a house for us; the ONLY people he had paid were the workers. NONE of the subs were paid; 12 liens were filed against the unfinished house. It was a mess, but since we had followed the letter of the law, we ended up okay.
In our jurisdiction, (New Brunswick!) under the mechanics' lien act, the homeowner/customer is responsible for a 15% holdback. If you do not hold back 15%, the law presumes that you have done so! (In other words, if you do NOT hold back 15%, you might wind up having to cough up the 15% on top of what you've paid the GC, then YOU will have to sue the GC to get it back). Subs and suppliers have 90 days from invoicing or completion of work to file a lien; after that, the lien must be "perfected", or it expires. So the normal holdback period is 90 days.
I would find a gentle way to tell the plumber that he should push the GC; you could also drop a hint to the GC that you don't appreciate being put into this position....hint hint....
The plumber is going to be talking to the gc soon. I think there is some kind of meeting set up so after that occurs depending on the outcome I'll talk to a lawyer. Mike Holmes - Canadian contractor out of ontario - recommends a 10 to 15% hold back for up to 30 days after completion. His time requirement and your time requirement of 90 days have both passed so given that any holdback I would have kept would have been paid out so I don't think the holdback alone would have prevented this situation. The re-lease of liens might have but then I would have to know the set of subtrades that he used - in this specific case I would have known he used a plumber so if I hadn't seen a copy of his release then I could have followed up with the plumber specifically and found out but there is still room for someone not to be paid. Assuming they have 90 days to file I guess I really need to holdback 15% for the full 90 days and find a GC who is willing to accept that. http://www.holmesonhomes.com Thanks for the post!
You are under no obligation to pay the plumber anything. After 11 months, neither he nor any other sub will be filing a lien against you.
But if you want to continue to work with the plumber, you should consider giving him a small percentage of what he is still owed on the job. This will constitute a premium on his future work but will also insure his absolute loyalty to you. He should provide a statement which indemnifies you from any future responsibility for his initial unpaid work.
I am up in Canada so the legal requirements are different here
There's more than just the legal system different up there, it's still 2006 here.
Joe H
Have the plumber hire a lawyer.
but not until you retain the best one first.
The GC is a thief
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Ah, these type threads really highlight the joys and risk avoidance of DIY <G>
Just my 2 cents.
But if you don't know what year it is you are already working at a disadvantage.
I just figured he was psychic. I wish I could stay a year ahead of my problems.
Heh,Yeah I think I was looking at post dated cheques for 2007 right before authoring the thread and obviously went off the deep end.
OK, I'll bite.
Where is the DIY? Is it the stupid GC who can't pay his bills right, or the clueless plumber who can't figure out whether it is this job for which he isn't paid, or the next one, or was it the previous . . .
The OP is just a regular guy, writing checks when asked, not lifting a tool, trusting the pros.
Gene,Not to put words in Junkhound's mouth, but it seems like his comment was suggesting his own gratitude for not having to hire others for most of his own work. He does a lot of different trades for himself, and probably saves on mental anguish because of it.Bill
When I saw the title to this thread I thought you knew about the job that I did earlier this year.
I was the cabinet maker on a fair sized remodel. Total job started out around $120K.
9/10 ths of the way through the GC tells the HO's that everything was on schedual and on budget!
1 week later the GC tells the HO that he's submitting a bil for extras at $42,000!!! Yikes, what happened to the "on budget, on time" thing. No change orders signed, no change orders even submitted to the HO. This GC when told by me that he should implement change orders said, "with the clientel that I deal with I dont need to use change orders", well, OK!
GC told the HO that his cabinet guy(meaning me) had givin him a bill for $17,000 in extras and that was one part of the bill. Problem is that I didnt bill for any extras, there were some but very minor and I just ate them.
Now the HO is questioning me and I mention to him(after lengthy disscussions) that he better be looking at getting some lien wavers because I think shid is about to hit the fan!
Well come to find out most of the subs had not been paid to the tune of approx. $35,000.
GC now walks off the job because he cant provide lien wavers because he hasnt been paying subs and he dont have the $ to pay them to get the lien wavers either.
Fast forward about two months and I was hired to finish up the job and the HO after having 4 subs put liens on his house went out and paid them off.
GC had the balls to file a lien himself for $25,000, which he will soon find out is going to get him in some hot water, apparently the courts dont like it if you file liens on a property which you have no right to do so!
In Texas the sub can file a lien on the HO's property and the HO will be responsible, even if the GC had been paid in full.
This particular HO when finished with the job had $165,000 in his $120,000 job. There were some changes that he did agree to but they didnt amount to $10,000, and then of course there was my money to finish up the job, which amounted to about $8-9K.
Mean while the GC is feeling protected because he's incorporated and the corp. dont have a dime to its name! He's a real scuz ball.
Hope you get out of this mess without to much added expense, and go see a good lawyer, ASAP. You need to know where you stand.
Doug
corporation won't protect him agaisnt his own self doing illegal deeds like fraud.
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This guy(GC) has taken a customer base in Austin TX of some well knowns and who have the money to do the work and flushed it right down the toilet!
I've never seen anyone self distruct in such a short time as I have this guy, he is hands down the worst business man that I've ever seen. And thats really what it boils down to, bad business man, no drugs, no alcohol.
I know at one point that he made the claim that the only person that made any money on this most recent job was Doug/me. Well he's right, I did make money on it, thats what I was there for!
For a $120K job he'd hand the HO a single paragraph letter stating how much he was charging and that he was remodeling at such and such address, thats it, all the paper work involved, no details, nothing.
When I'd talk to him about it he'd just shrug it off and say that with his type of customer he didnt need a contract! He knew it all, and could actually talk a good tale, but when it came time to show it he was a disapointment. Damn shame.
Doug
guys that have inc's think they have no liabilty. a lawyer thats been out of school for fifteen minutes can spend a couple hours going over documents and bust most small corps wide open.i know i was inc. at one time,it's a false sense of security for most small guys.larryhand me the chainsaw, i need to trim the casing just a hair.
guys that have inc's think they have no liabilty
I think he's about ready to find out then because I know this guy and I'm sure he thinks he safe.
He screwed these people so bad and he's not smart enough to realize that they have the money to go get a real lawyer. I think they would have droped the whole thing and just lost the extra money chalking it up to "experience" but when he slapped the lien on there house I think he crossed the line.
The lady of the house is the head of the finace division of a well known bank and I'm sure the embaressment of someone putting a lien on there property didnt set well with her, I know it wouldnt me.
Doug
the plumber and the gc are ~friends and have been working with each other for years and the plumber has had problems collecting from the gc in the past. Plumber has left many phone calls that have been unreturned by gc.
Sounds to me like the reason the are such good friends is because the plumber allows himself to be used by this guy. If he has an issue with not being paid in the past why would he continue to work for him now???
You are not obligated to pay him anything, nor should you!! Its up to him to notify the gc of any changes in his scope of work and the associated costs. If he's coming to you for money, maybe he's on his way out financially and is looking for lifelines? I would find another plumber IMHO.