Quote:
Originally Posted by trubuilt
I think if your friend held back 10% he would have been good (some builders I work for do this if we have a contract,but don't if we don't) also how long did the guy waited to put the lien on??? I think you only have 30 days. He should seek some legal help to clear this up.
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This is correct, except it is 45 days from either completion of his job or 45 days from the posting of a certificate of substantial completion. (90 days if its oil & gas work)
Assuming the general contractor was paid in full before a lien was registered, in the situation you described, your friend is only on the hook for up to 10% of the general contractor's contract for all subs who register a lien. Your friend had the right to hold back 10% of each progress invoice from the general contractor until the job was completed, to ensure subs were paid.
If that sub has been off the job site for 45 days and hasn't registered a lien, he's SOL going against your friend, but still has a claim against the general contractor.
Edit: Assume the contract for building the garage was $50K. If the sub has put $10K worth of concrete into the garage, but didn't get paid, the sub only has a claim against the owner of the property for $5K, 10% of the general contract. The owner had the right to hold that $5K back until he was assured by the general contractor that all subs had been paid (usually through a statutory declaration). If the owner didn't hold it back, and a sub isn't paid, the owner is potentially on the hook for $5K. This is to ensure that subcontractors aren't taken advantage of by unscrupulous general contractors.