contractor and subcontractor lien Issues

3 weeks ago

I hired a fence guy to put a the fence around our commercial building since it is required by the county.
The contractor hire a sub-contractor welder to put build the gate frame. The contractor did not pay his sub-contractor. The wood fence that we originally bid and pay deposit on was too heavy and have failed county inspection 2x so the fence contractor switch to chain link gate with privacy mesh. He did not tell me that this is now an extra charge. I just found out from the final bill. He removed the wood gate,
replace it with chain link with privacy mesh, and that pass the inspection. I don’t want to pay the fence contractor the balance for 2 reason. First, He did not pay his sub-contractor who is now threatening me that he will file a lien on my property. Second, he is charging me extra $550 for the chain link and privacy mesh. I agreed to the wood gate which is more expensive than chain link. Since he could not get the wood gate to work and he switched on chain link. I assume that contract the price remains and just switch material. Apparently, he said that is extra cost and he is now threatening to file a lien on property as well. He kept telling me to ignore his sub-contractor. What is the right thing to do?

Chief Legal Officer Levelset

Ignoring the claims of an unpaid subcontractor can be a very dangerous game to play. Provided the required actions have been taken, a subcontractor could file a lien against the property just like the GC could, and even enforce the lien and foreclose on the property if s/he remains unpaid.

There are prerequisites in order to allowed to file a lien in Florida, however (both for the subcontractor and the GC). Subcontractors must provide a preliminary Notice to Owner within 45 days after first providing labor or materials to the project. Additionally, potential lien claimants must file their lien within 90 days after last furnishing labor or materials to the project, as well as comply with specific formal requirements. Additionally, Florida law states that “no lien shall exist in favor of any contractor, subcontractor, or sub-subcontractor who is unlicensed,” so, to the extent the contractor is unlicensed, a valid lien may not be available.

Whether or not an additional charge for modifying the work to be provided under the contract is legitimate can be a question of the contract itself, and ho change orders are governed. In some cases, a change order increasing the price of the job would need to be a signed agreement. It’s worth checking the original contract to see how change orders are supposed to work.

As said above, ignoring an unpaid sub is dangerous. This may be a situation in which payment to be made (if any is actually remaining due) could be made by joint check in order to ensure the payment of the sub, and avoid a lien. In any event, though, it is likely not the best idea to completely ignore the unpaid party. Open communication between all parties and see how that payment dispute can be worked out.

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