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What can be done about the following situation?

I was hired as a subcontractor to do some repairs on a home that is bank-owned to prepare it to sell. I do not have a signed contract. I do have the original quote, although it was never signed. The construction company that hired me has not made any payments for this project. I have worked for them in the past and they have paid. If I calculate all my labor and materials invested in the project, it amounts to $9,500. I have told them I will settle for $5,000, but still have not received anything.

1 reply

Sep 4, 2018

I'm sorry to hear that you've gone unpaid - everyone deserves to be paid what they've earned, and you definitely shouldn't have to settle for half of what you're owed. First, one option may be to send a Notice of Intent to Lien. This document warns recipients that, if payment isn't made soon, a lien will be filed. Considering a mechanics lien is such a drastic remedy (more on that in a second), the threat of lien can go a long way to compel payment. You can learn more about a Notice of Intent here: Notice Of Intent To Lien May Be Enough To Get You Paid.. Another option may be to file a mechanics lien. Mechanics liens are the construction industry's most powerful tool for payment. When a contractor, sub, or supplier has gone unpaid for construction work, they may be able to file a mechanics lien which attaches to the project property. This lien will make it very tough to sell or take a loan against the property, and it can create a lot of headaches for the owner regardless of whether they intend to transfer. Plus, if the lien is not resolved (and if it is ultimately enforced via lawsuit), a lien could result in the loss of the property. Naturally, headaches for the owner become headaches for the contractor and everyone down the payment chain, too. You can learn more about the mechanics lien remedy here, and learn how to file a Kansas mechanics lien here: How to File a Kansas Mechanics Lien: A Practical Guide. Keep in mind, though, that mechanics liens have strict notice and deadline requirements (and those requirements are better laid out under the links above). Another option may be to send a payment demand letter threatening legal action. Often, threatening a nonpaying customer with a breach of contract claim, a claim under prompt payment laws, or even a claim under unjust enrichment. When a demand letter is sent via an attorney, it tends to carry a little more weight. If threats aren't enough, taking to the courts via litigation may be another option - but litigation can be risky and expensive.

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