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I am a general contractor being billed the full amount on work that was not performed including getting an electrical inspection for my clients home. They left the project declaring themselves finished just for us to quickly realize they did not do what was discussed and agreed to verbally by the foreman. They are now threatening with collection activity. How do I handle this properly?

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Feb 18, 2020

Things can get dicey when a subcontractor is threatening collection activity - like filing a lien, pursuing a lawsuit, etc. And, it's natural to be careful in picking a response. If a subcontractor hasn't performed the work they were hired to do, but is still threatening claims, it'd be wise to document everything. Performing a walkthrough and evaluating all of their work, taking specific notes, even taking photographs will help to establish the alleged issues with that subcontractor's work. With that in hand, it will be easier to argue that full payment isn't actually owed and to negotiate a resolution. And, if specific claims are being alleged, that documentation can be used to show that the claims would be improper moving forward. Ultimately, when claims are only being threatened, there isn't always much to do to defend against the prospective claim, quite yet. Rather, the pre-claim period is for negotiating a resolution and avoiding the dispute snowballing out of control. But, it's also a time to prepare for the worst. In addition to the above, I think this article should be helpful: I Just Received a Notice of Intent to Lien – What Should I Do Now?

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