Question on a deadbeat builder/renovator

[OldDutch]

Originally Posted by Dynamic

I'm not sure how it ended because I didn't want to ask but the fact that this general was still building houses baffles me.

After this I am thinking this isn't the first or last time my GC will do this. He actually was supposed to go with another company but that fell through for some reason and he had to go with another guy who he is screwing.

I think many of these guys just keep doing this until their name is mud, and shut down and start up under another name. It is probably easy to do, and once you have wrecked your name in a city you move to another and repeat.

[Inferno099]

We had a lien put on us by the flooring subcontractor and TBQH when we received the lien document in the mail my wife & I were more than a little annoyed since work was still being done in our home for the renovation and although we paid the general contractor in full less the 10% withholding on invoices received - they had not paid the flooring Sub.
But what was the more annoying part - the flooring company was still working in our home & also fixing deficiencies that occurred.

A little while later we got the Sub to have lien removed & provide us the document proving this.

Through this thread it has been interesting to learn a few things - however unless you are in the industry or past experience - these items that have been discussed about the Statutory Declarations - (we never received from our general after completion), nor about this "prime contractor" responsibilities being assigned to the general contractor mentioned in an earlier post.

I guess myself as a lay person with no experience in this area - these are things wouldn't even cross my mind as my expectation by hiring a general contractor is this is all taken care of professionally & correctly.

[DuffMan]

I would think your contract is with your general contractor and that's it.
His contract is with his sub contractor.

If there is nothing in writing between you and the sub I don't see how he could do anything. I could say I did something on your house and put a lien on it.

[llwhiteoutll]

Originally Posted by DuffMan

I would think your contract is with your general contractor and that's it.
His contract is with his sub contractor.

If there is nothing in writing between you and the sub I don't see how he could do anything. I could say I did something on your house and put a lien on it.

It's 100% legal and possible, Builders Lien Act. We have withholdings and statutory declarations as part of all our multi-million contracts at work for exactly this reason.

And, no, you couldn't just randomly put liens on someones house lol.

[Flamette]

FYI: In commercial construction, when a lien is filed it stops the flow of contract funds, so the GC is legally withheld payment until the liens are removed. Every GC contract I've seen puts the responsibility of turning over a lien free project squarely on the shoulders of the GC.

In the future, you could add that clause to any residential contract - then as someone mentioned earlier, release the 10% holdback after 45 days you've hopefully retained.

[OldDutch]

Originally Posted by DuffMan

If there is nothing in writing between you and the sub I don't see how he could do anything. I could say I did something on your house and put a lien on it.

Yes and No, from what I have learned yes someone could fraudulently apply to put the lien on, but it goes to a judge and you can show proof that no work was done it goes away. The person putting the lien on would then have lied on a affidavit to file the claim, and I believe would be subject to penalty, plus restitution of your legal fees.

In short, yes but it would only backfire on the jerk in the end. However, I am no expert, just what I learned in this thread.

[DuffMan]

Originally Posted by llwhiteoutll

It's 100% legal and possible, Builders Lien Act. We have withholdings and statutory declarations as part of all our multi-million contracts at work for exactly this reason.

And, no, you couldn't just randomly put liens on someones house lol.

So the guy could hire his brother in law for the job of sweeping up, he doesn't get paid and puts a lien on your house?

Doesn't make sense. I think subs hired by a gc are his responsibility, your contract is with the gc, what he does is his business.

[Flamette]

"Sweeping up" would not be considered a legal improvement to the real property so the brother-in-law would not have lien rights.

[Inferno099]

Originally Posted by DuffMan

So the guy could hire his brother in law for the job of sweeping up, he doesn't get paid and puts a lien on your house?

Doesn't make sense. I think subs hired by a gc are his responsibility, your contract is with the gc, what he does is his business.

Not specific to the sweeping - but to actual improvements to the home.

The current process doesn't make sense to me either.

BTW what occurred to our property with the lien was in 2012....

I 100% agree with you the way it should work is:
the GC assets should have a lien put on by a Sub that is not paid by the GC - my own experience confirms this is not the way it is in reality.

As I mentioned previously - the Sub (flooring company) felt it was not paid in timely manner by the GC even though we as the home owners paid all invoices less the 10% withholding - and flooring work was still in process due to various GC & other Sub project delays and deficiency remediation being completed.

We ended up with the lien registered against our house at land titles.

Obviously this made my wife & I more than a little annoyed especially as we used flooring company before & were surprised at not knowing there was the issue they had with the GC.... as mentioned it got resolved, and I was provided the proof the lien was removed from my property.

Having this occur personally, I believe the way it should be is the contracting party (GC & SUB) - if a lien is needed - should go against the GC business/property - not the customer's home who can prove if they paid the GC.
And if it really is the homeowner at fault then the GC could put a lien on the homeowner they are contracted with if proven that payment did not occur from customer to the GC.

However, I'm sure there is precedence and other reasons why government decided to allow this process the way it is to aggravate the customer / property owner rather than ensuring all is responsibility of the GC.

[Flamette]

^ I know it doesn't seem to make sense why the process is set up like this, but ideally it should work like this:

sub files lien -> owner stops paying GC -> GC pays/settles with sub -> sub removes lien

If the sub filed against the GC's property there is no incentive for resolution until the GC wanted to sell and needed a clear title.