I am the project manager for the property owner. We recently completed a project, and the General Contractor has been paid in full for the contract total and provided an unconditional lien waiver. However, one of their subcontractors reached out to me saying they had not been paid and that they were moving forward with filing a mechanic's lien against the property. Am I responsible for paying the subcontractor if the General Contractor did not fulfill their obligation?
The trade-off for a stranger to a property to be able to file a mechanic's lien directly against the property is that the owner cannot be made to pay for the same work twice. Since the contract balance has been fully paid to the general contractor, there is no lien fund, and no recovery can be had on the lien. While the subcontractor can file the lien and get a stamp from the County Clerk, that's all the subcontractor will have, and it will not be able to recover on the lien.
As a practical matter (and hopefully this subcontractor is represented by counsel who would understand the lien fund defense), offer to provide the subcontractor copies of the GC's final payment requisition, and copies of all payments totaling the adjusted contract sum. Then, you can explain that while you feel for the subcontractor and the situtation that they're now in, since the GC has been fully paid filing the mechanic's lien would be futile. You can also mention that since the GC has obviously been paid for that subcontractor's work, it seems that in addition to a simple breach of contract by the GC there may have been a diversion of statutory trust funds committed by one of the GC's principals, and that may permit personal liability.
Agree with the prior commenter. You should try to encourage the subcontractor to sue the GC for breach of contract, among other possible claims including diversion of trust funds under Lien Law 3-A.
No, once you have paid in full and have a waiver of lien, the lien fund is exhausted. You should send the subcontracor a letter informing the subcontractor, copy to the general contractor, telling hte subcontractor that the " lien fund is exhausted" as the "genreal contractor has been paid in full."