Home>Levelset Community>Legal Help>How do I get paid if the contractor is also in a fight for payment?

How do I get paid if the contractor is also in a fight for payment?

I have a contractor that is in a legal fight with the home owner to get paid. We gave up our rights to file a lien based on the time frame that we were onsite. The Contractor keeps telling us that he is going to get us funded but I am not confident in him. Will we be able to go after the contractor to get funded as he is the only signer on our proposal? Also the contractor did not provide us with a contract to sign so the only legal document we have is our signed (by contractor) proposal. We don't know what paperwork the contractor has with the homeowner as we have had no contact with the homeowner. Also the contractor has stated they started the lien process for all subs to be funded, but that could take forever to get funds. Let me know what the best way to navigate and also keep a good working relationship with the contractor.

1 reply

May 27, 2020

If your mechanics lien deadline has been missed, then you won't be able to go after the owner for payment, in all likelihood. If you're looking to speed up payment, then you'd need to look to your customer. And, ultimately, your next steps are up to you and what you're willing to do to ensure payment. Obviously, some recovery steps could affect the relationship with the customer - so that should be taken into account. Unless your purchase order included some clear pay if paid language (and I'd be surprised if it did), then the customer is still required to pay you, regardless of whether they've been paid. And, if they've failed to make payment as required under the contract, then legal claims like breach of contract should be on the table. That means putting pressure on that customer - by sending invoice reminders, payment demand letters, or even filing legal claims - could be an effective way to force payment. Collections may be an option as well. But, again, that could put some stress on the working relationship. In lieu of threatening a lawsuit or applying too much pressure, you might be able to meet in the middle with your customer. They can absolutely ease your fears by signing documents securing your rights or reinforcing their promise to pay you from the proceeds of their lien. More discussion on some of those options here: Don’t Want to File a Mechanics Lien? Here Are 5 Other Options. Additionally, entering into a formal payment plan (via a written and signed document) might be another option for easing the customer's burden while also getting what you're owed.

0 people found this helpful

Helpful