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GC withholding payment for one completed job due to dissatisfaction with another unrelated job. Do I have any recourse?

TennesseeCollectionsMechanics Lien

Our company has worked with one GC on two different projects. One project was an outdoor project in which the GC demanded that we use a material that we knew was unsuitable for outdoor use and advised them against it because we knew there would be future issues. We have gone back on 3 occasions to fix this project but still, more work is needed long-term due to their misstep. We simultaneously completed a second project with the same GC, to the homeowner's satisfaction and now the GC is withholding payment for the completed job until we repair the other project. We have assured the GC that we would happily assist with the other project once we receive payment for the job we completed but they are still refusing to pay us. Do we have any recourse in the situation? Please note that a preliminary notice was not sent.

20 replies

Oct 26, 2021

I'm sorry to hear about the issues you have incurred thus far. First, since no dates were provided in your question I am not sure if the preliminary notice deadline has passed or if you are still within the timeframe in which a notice may be sent. If you have not been paid for your construction work, you likely can file a mechanics lien to initiate payment. As a sub or other contractor, in Tennessee notice of non-payment or a preliminary notice must be provided to the owner within 90 days of the last day of the month labor and materials were provided. Once a preliminary notice has been sent, then a mechanics lien may be filed within 90 days of completion of the work or improvement. Finally, all lien claimants without direct contact with the property owner must initiate an action to enforce their lien within 90 days of the lien's filing. If the property owner demands enforcement of the lien, then the time in which you have to enforce the lien may be shortened to 60 days. 

It seems that your main issue is getting paid as a subcontractor on this project. One of the best ways to collect the money you earned is by educating yourself on subcontractor payment rights. Subcontractors have the right to get paid for the work and improvements they make to real property. The first right subcontractors have is to file a mechanics lien which I discussed above. Also, like I previously detailed as another contractor you need to send a preliminary notice to protect the lien rights. However, this deadline can be a challenge for some other contractors considering they spend much of that 90-day window waiting for a check to show up instead of taking action. Besides, in many cases, the simple threat of a lien is all it takes for the prime contractor or project owner to cut a check. In those situations, sending a Notice of Intent to Lien (NOI) will show the paying parties that you know your rights and that you aren't afraid to file a lien if that is what it takes to get paid. 

I hope that helps! Good luck! 

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