Hi, I have a home I am in the process of rehabbing. I hired a contractor who turns out to not have a builders license so he had someone else pull the main permit to work on the house. He also had sub's pull permits for electrical, plumbing and framing. We are half way in the job, the main contractor (no builders permit contractor who I have a written contract with) has 50k out of the 85k he quoted me. He has not paid the sub contractors. Can the sub contractors come after me for the money they were not paid by the contractor who signed the paperwork to do the work with me?
What do your contracts say regarding who the General
Contractor is? Is it the contractor with a proper license, or the one without a
license? Some owners think they are working with Mr. X, but the contracts say
Mr. Y is in charge, and it may be important to know exactly what your contracts
say.
Also, was a “Notice of Contract” filed by the GC before the
job started?
A Residential license is required for residential building
contractors when the cost of the undertaking exceeds $75,000. Residential
subcontractors who bid or perform work in one of the residential specialties
must have a valid residential license for that specialty when the work exceeds
$7,500, including all labor and materials. Home improvement contractors are
required to register with the Board in order to perform home improvement work
when the total project value (including labor and materials) exceeds $7,500,
but does not exceed $75,000.
It sounds like the unlicensed general contractor may have
violated the above. Generally, this means the general contractor would have no
right to file a lien or privilege on the property. However, I understand your
question to be, specifically, whether these subs can force you to pay them for
their work in the event the general contractor does not pay. The answer is
likely yes, but there are a number of requirements for a subcontractor to
properly file a lien. Also, subcontractors have a far more difficult time
collecting from owners without a lien, but it is not impossible.
Louisiana’s Private Works Act has different rules for
claimants who do not contract directly with the owner, but who instead deal
with general contractors (as in your case) or subcontractors. Subcontractors
have differing time periods in which to file their statements of claim,
depending on whether notice of the contract was recorded.
If a notice of contract was timely and properly recorded,
subcontractors must file their statements of claim and deliver copies to the
owner within thirty days from the filing of a notice of termination. If a
notice of contract was not filed, the time period is sixty days, running either
from the filing of a notice of termination or from substantial completion or
the abandonment of the work. The Act makes an exception for sellers of
materials used in a residence, who get seventy days in which to file their
statements of claims if no notice of contract was filed.
There are a number of facts that could change the above
analysis, and your particular situation could turn on facts not yet provided.
I would recommend that you consider calling a meeting with
the GC and an attorney. I would confront him regarding the licensing and
status of payment on the job. If the facts are as you state, he may have some
serious criminal exposure (criminal statutes against contractors in Louisiana
are quite strong) and you may want to investigate whether you need to file a
police report. It may also be prudent to make a claim with the Louisiana State
Licensing Board for Contractors. You probably do not have an obligation to
start paying subcontractors directly right now, but that could be necessary in
the future. Give us a call if you need further assistance. 504-323-5885