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do i file a lien on property or sue the gc, or both?

UtahConstruction Contract

I am an HVAC contractor and was a sub on a project for a gc. The original proposal was signed by both parties and in the proposal it says "half of proposed cost is to be paid prior to any work" as all my proposals mentions this.. So I considered since the gc was actually a "so called friend" of mine before I got my S-350 license, I didn't see any red flags with staring the work when he asked me to and he'll get the half paid in 1 week. after week 3 he paid me $2,500 which half was supposed to be $4450. I began the job in September of this year and completed in November. the job was on the mountain and I did it all by myself so that's what explains the long duration it took me and all parties were aware and its even written down on the invoice. I am being force to file a lien on property and I happen to reach out to the homeowner and the homeowner tells me that he paid the gc and that gc shouldn't have any excuses about why he cant pay me. so I contact the gc and the gc says he has not got paid yet. he also told me to F*%@# off and that he will pay me when he wants to.. I feel I have a case here? thank you so much for your time!

1 reply

Dec 19, 2019
When unpaid for the work they perform, subcontractors are generally entitled to mechanics lien rights. And, as you may know, mechanics liens are an incredibly powerful tool for payment recovery - they work in a number of different ways (we counted 17) to force payment. To be sure, despite what an owner might argue, subcontractors in Utah are entitled to file mechanics liens for the full amount that they're owed on the job - and, as a result of their GCs failure to pay, an owner may end up having to pay for the work twice. Naturally, owners won't want to pay twice, and if their contractor has taken off with some of the funds entitled to the sub, the owner may well have a claim against the contractor, too. So, if payment is owed but hasn't been paid, then filing a mechanics lien may be warranted and may well lead to payment - whether that payment comes from the GC or the property owner. If you feel like filing a mechanics lien may become necessary here, these two resources should provide some valuable insight into that process: (1) Utah Mechanics Lien Guide and FAQs; and (2) How to File a Mechanics Lien in Utah – Step by Step Guide to Get You Paid.

Recovering construction payments without filing a mechanics lien

Of course, keep in mind that a mechanics lien is generally considered the nuclear option - and other recovery options can be helpful for recovering payment before having to resort to a lien.

Demand letters

Demand letters begin to formalize the dispute, and they put pressure on a customer to pay. A demand letter will generally include specific legal threats that will be undertaken if payment isn't made, and it will usually set a deadline for making payment. By making it clear that nonpayment won't be tolerated, and by showing you're unafraid to do what it takes to obtain payment, it might be easier to convince a customer to do the right thing and pay what's owed.

Notice of Intent to Lien

Escalating things even further with a Notice of Intent to Lien can help, too.  A Notice of Intent to Lien is a warning shot - it lets recipients know that if payment isn't made and made soon, then a mechanics lien will be filed. Further, it's really valuable to send a Notice of Intent both to a nonpaying customer and to the owner. If the owner understands that their GC's failure to pay can directly impact them and their property title, they may be more willing to step in and put pressure on their GC or to pay the claim. And, with additional legal pressure on themselves, the GC may be more willing to pay, too. More on Notices of Intent to Lien here: What Is a Notice of Intent to Lien and Should You Send One?
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