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When Subcontractors are Owed Payment Part 2

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In this two-part article, a Charlotte construction litigation attorney is discussing the options that a subcontractor has when they are owed compensation for completed work. In the first part, we discussed filing a mechanic’s lien against the property. We also discussed the pros and cons of a lien foreclosure. In this part, we will discuss other important legal topics related to subcontractors and their role on projects.   

Violating Trust Laws

As we have discussed, if the owner refuses to pay the general contractor, the general contractor obviously cannot compensate the subcontractor. In some cases, the general contractor was paid by the owner and is holding onto the subcontractor’s money “in trust.” Clearly, if the general contractor utilizes this money for their own personal expenses, this is a violation of the law, and the subcontractor should consult a Charlotte contractor lawyer.  

If you are a subcontractor in this position, when you consult an attorney, they will outline your legal options. For example, since you can’t file a lien against a general contractor, you may want to pursue legal action and sue the general contractor that owes you money. Another option is to create a joint lawsuit with other professionals that are owed money on the project. In some cases, litigation isn’t the best course of action. If you intend on working with the contractor again, a Charlotte contractor attorney can write a demand letter requesting payment or pursue alternative dispute resolution (ADR) options. 

Consult a Construction Attorney

There are many reasons to consult a Charlotte contractor attorney when engaging in an agreement with a general contractor (or subcontractor). For example, if an uninsured subcontractor’s employee is injured, the workers’ compensation payments would be the responsibility of the general contractor’s policy. Depending on the clauses within the contract, the subcontractor may have breached their contract if they failed to obtain coverage as required in the contract. In other cases, a subcontractor may have coverage, but it’s insufficient coverage as stipulated in the contract.     

It’s critical that general contractors and subcontractors alike employ a construction attorney to draft, review, and revise all of their contracts. To ensure your best interests are protected, consult the experienced construction attorneys at Cotney Construction Law. 

If you would like to speak with a Charlotte construction litigation lawyer, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.