What steps can I take as a subcontractor if the contractor changes the terms of original agreement?

8 months ago

We signed a subcontractor agreement with an asphalt sealcoating company to perform asphalt paving work at an apartment complex. The total agreed upon amount was $20,200 with $6000 as a down payment. We signed a contract stating we agreed to do the job for these amounts, but we told the contractor from the beginning we would need more money for materials than just the $6000. We were verbally told they were waiting on payments from other jobs and they would supply more money towards materials after they received funds. We proceeded with the work without incident. We did a small side job for this same company on a Saturday and we were supposed to be paid $2400 within a few days. No contract for that job, but I do have messages stating the amount. We were only given $1500 of the $2400. As time went by we quickly spent the $6000 down and asked contractor for more money for asphalt. They agreed to pay the asphalt plant for $1600 in material put down and used and any other asphalt needed to complete the job. We showed up on what should have been the final work day. The contractor was supposed to pay the asphalt plant, but was conveniently missing from the job site. Then a dump truck showed up with cold asphalt in it. We called the asphalt plant, they agreed the asphalt was no good and asked to send the truck back, they were not charging us for that material. Meanwhile, the contractor still did not show up and pay the asphalt bill from the previous day so we stopped the whole job. The contractor showed up 3 hours later upset that we stopped the job and then refused to pay the $1600 asphalt bill. His wife then sent me a text message saying they never agreed to pay it in the first place (which they verbally did). This sudden 180° flip made me suspicious, so I started doing research into this contractor. On the exact date I signed a contract with him, another local asphalt company filed a lawsuit against them for failure to pay them $23,500! (They were a subcontractor also). Once I found this out I went directly to the property manager (who is not the owner). The property manager wants me to enter into a contract with him and bypass the contractor I currently have a signed contract with. The contractor refused to allow this, instead they are trying to force me to sign an amendment which says I owe them $1000 for things I never agreed to pay for, and that they get final approval of the job before I get my money. I feel they will just look for anything to get out of paying me. Now the contractor is saying I have 3 days to finish the work or they will have someone else come in and I then will not receive any more monies. What am I supposed to do in this situation to protect myself! Nowhere in our agreement does it state I have to have the job completed by a certain date. Please help!!!

Senior Legal Associate Levelset
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It’s frustrating when payment isn’t being made for the work you perform. But, there are ways to force payment, which we’ll discuss below. But, keep in mind that if at all possible, trying to talk out the issue before escalating the dispute can be helpful to keep the payment issue from snowballing. Obviously, though, not every dispute can be talked out – particularly when a contractor has a history of failing to pay their suppliers.

Threatening a mechanics lien filing can escalate the dispute and raise the stakes for the contractor

Nobody likes dealing with a mechanics lien recording. They’re a headache to file, and they create much more serious issues for owners and contractors. Because mechanics liens are such a powerful tool, though, the mere warning or threat of a lien claim can get payment talks moving in the right direction.

By sending a document like a Notice of Intent to Lien, a supplier can show their contractor and the owner that they’re serious about getting paid and that they won’t be toyed around with. And, when an owner and/or project manager are informed of the debt, they can put additional pressure on the contractor, leading to payment. More on that here: What Is a Notice of Intent to Lien and Should You Send One?

Pursuing a lien claim may be effective, too

Mechanics liens will typically be one of the most powerful and efficient recovery options available when a construction debt is owed. They work in a number of ways to force payment (we counted 17), and a lien filing can generally be made even when there’s a dispute as to what’s owed.

So, if it looks like a contractor will be refusing payment, and if other attempts at recovering payment haven’t been successful, moving forward with a lien claim may be an effective option to push for payment.

More on Indiana mechanics liens here

– Indiana Mechanics Lien Guide and FAQs
– Mechanics Lien Indiana: How to File a Mechanics Lien in Indiana

Other options can also help to recover payment

Certainly, there are options outside of the mechanics lien process that will help to push for payment. If a contractor isn’t abiding by the contract they signed, breach of contract could always be on the table. Plus, it’s always possible that other causes of action will be available.

For a quick rundown of  some other recovery tools: Other Options For Recovery. Further, keep in mind that reaching out to a local construction attorney can help to clarify how best to force payment from an unwilling contractor.

Disclaimer: The information presented here is not legal advice and should not be construed as such. Rather, this content is provided for informational purposes. Do not act on this information as if it is advice. Further, this post does not create any attorney-client relationship. If you do need legal advice, seek the help of a local attorney.
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