Home>Levelset Community>Legal Help>We have filed a mechanics lien against a property because the general contractor is stalling and not paying us. They now want to issue 2 party checks to pay some of our subs. If we accept this will we loos any of our rights to the lien we have filed. Will we have to file another lien?
We have filed a mechanics lien against a property because the general contractor is stalling and not paying us. They now want to issue 2 party checks to pay some of our subs. If we accept this will we loos any of our rights to the lien we have filed. Will we have to file another lien?
We are having trouble getting paid from a general contractor.
1 reply
Aug 10, 2018
I'm sorry to hear about that. Join check agreements are relatively common in the construction industry. When utilized properly, they can be a good tool to be sure the entire payment chain has received payment. For an all-in-one crash course on joint check agreements check out this post: Joint Check Agreements: What Is A Joint Check Agreement? Particularly important is the section of that post citing the Joint Check Rule - under which accepting a joint check could lead to the loss of payment rights. If joint checks are used and all does go well - reducing the amount of an already-filed mechanics lien may become necessary. It makes sense - a party's claim will likely include amounts they will pass through to their subs and suppliers. Thus, if lower tiered subs and suppliers are no longer owed payment, the amounts in a lien claim that would have been passed through would likely need to be removed from a lien claim. Granted, this would likely not require a new lien filing - instead, an amendment to the lien reducing the amount of the lien might be sufficient. In any event, whether or not to accept a joint check scheme during a payment dispute will ultimately be a case-by-case decision. Some subs may find it worthwhile to hold out for the final, agreed-upon payment, while others may settle for some temporary relief for their sub-subs and suppliers. The best thing a party can do, though, is to be educated about the implications of joint check agreements before making the decision - and the post above goes a long way on that front.