Issue with Payment and CO

[ITO]

1) Most GCs are slow pays on bigger jobs 60-120 days late is not uncommon, but most GCs also know they can?t string out a weak sub or they will lose the sub.

2) After you walk off a job for non-payment, the chances of getting back on the job to finish go down in direct proportion to the amount of time you are off the job. If a GC can keep going without you, chances are he will.

3) Exactly what ?growler? said, a lien is against the property, not the GC and filing a lien will not prohibit you from getting work from said GC in the future, or cause the GC to go bankrupt; filing liens is just part of this business and rest assured if the owner were not paying the GC, he would be Jonny on the spot filing his lien.

4) The BM at the supply house was keeping you out of trouble, now do your part and get both of you paid.

5) GCs don?t care about subs, you may have a relationship with them but it will last only as long as you are performing and getting paid. Once either stops, it?s over.

 

[tyha]

1) Most GCs are slow pays on bigger jobs 60-120 days late is not uncommon, but most GCs also know they can?t string out a weak sub or they will lose the sub.

2) After you walk off a job for non-payment, the chances of getting back on the job to finish go down in direct proportion to the amount of time you are off the job. If a GC can keep going without you, chances are he will.

3) Exactly what ?growler? said, a lien is against the property, not the GC and filing a lien will not prohibit you from getting work from said GC in the future, or cause the GC to go bankrupt; filing liens is just part of this business and rest assured if the owner were not paying the GC, he would be Jonny on the spot filing his lien.

4) The BM at the supply house was keeping you out of trouble, now do your part and get both of you paid.

5) GCs don?t care about subs, you may have a relationship with them but it will last only as long as you are performing and getting paid. Once either stops, it?s over.

I agree 100% with GC's dont care about subs except for as long as they can use them. Thanks for all of you post and let me clarify something here. I wouldn't lien the property, that is a good way to possible never get your money. liening a property that gets lieased out (this is a shopping center that has 50 or so leased spaces) doesn't do any good around here until the property is sold which could be never. We would step in and file lien on funds due the contractor. That goes straight to the developer and states that the gc gets no more money until we are paid.

 

[romexking]

It seems that most people are forgetting that the OWNER of the project is still liable for payment to the sub no matter if they have already paid the GC or not. That is the benefit of a lien, a claim against the property owner. No owner wants to have a lien or their property, and usually they make a payment directly to the sub, bypassing the GC.

 

[ITO]

I wouldn't lien the property, that is a good way to possible never get your money...

Hmmm never heard that before. In fact in all the years I have been doing this for all the times I have filed notices, there has never been an occasion that I was not paid after filing a lien.

Has anyone here ever filed a lien and still not been paid?

 

[john_axelson]

Huh??

Huh??

I didn't follow the logic of File a Lien and Don't Get Paid.

That is the whole purpose of filing a lien. I think that you need to heed some of the advice that came up several times in this thread and get yourself some legal counsel. At the very least, have you questioned your accountant of their opinion on you not being paid $140,000?

In matter of the change order being done by possibly someone else, you can't worry about that. If you are on a project with a contract, you need to read your contract in its entirety. Or perhaps have the legal counsel read it for you. Most contracts state that the owner has the right to hire another company to do work on the project. The GC merely had to tell the owner that he felt your change order price was too high (which by your brief description - your price sounds reasonable). The owner then has the right to hire someone else to complete it. Especially if this was additional work outside of the scope of your original contract.

At the very least you should make an inquiry to the other subcontractors on the project to see if they have been paid in a timely fashion, inquire with the owner or the owner's rep on if the GC has been paid for the work that you have performed and HIRE an attorney. Then follow your legal counsel's advice, which I am guessing would be to file a lien ASAP as ITO mentioned. Most developer's are working from construction loans and no bank is going to want to see that money they have borrowed out for payment, hasn't been used to pay off the sub-contractor's. This could be the additional pressure you need to get the $140,000.

Oh yeah, one other thing, check with your legal counsel and make sure you are not in a breech of contract for not being on-site. Did you follow all of the contract requirements and have you met all of your contract obligations?

 

[SmithBuilt]

Has anyone here ever filed a lien and still not been paid?

Yes, when the GC and owner file for bankruptcy. Nobody wins. Again I'm not sure if this applies to this situation the owner may be well banked, but in my case the owner did not have the money.

As said before find a lawyer and start there. Too much money at stake on this one.

 

[growler]

Yes, when the GC and owner file for bankruptcy. Nobody wins.

Bankruptcy does not negate a lien.

Think of it this way. Real property does not just disapear, someone owns it and that someone may be the bank or even the goverment. A lien is a claim against the title to that piece of real property and to clear the title at some point a settlement will have to be reached ( payment and interest, lots of interest, componded interest).

So long as you keep your lien updated ( very important ) you will always have a ligitimate claim against the property.

Even if purchased by someone then you still have a claim against it ( they should have done a deed search ).

Read this: http://www.realestatelawyers.com/liens.cfm

 

[cschmid]

if they file bankruptcy and list you as a debtor your lien is history..been there done that..just because it is on real property does not exempt it..

Edited: if it is sold your lien is satisfied before seller gets cash..sold in bankrutcy you have to have enough cash to get satisified..

 

[petersonra]

Bankruptcy does not negate a lien.

Think of it this way. Real property does not just disapear, someone owns it and that someone may be the bank or even the goverment. A lien is a claim against the title to that piece of real property and to clear the title at some point a settlement will have to be reached ( payment and interest, lots of interest, componded interest).

Liens often result in payment - at some future date. They can be a powerful tool, but they don't guarantee you get paid.

Look at it this way. A mortgage against a property that is not worth what the mortgage is for does not mean the mortgage holder will ever be paid off either. in bankruptcy, secured debts get paid off when the property is sold, and you get whatever that is, but you have to share it with the other secured creditors for that property.

 

[ITO]

In some cases, certain types of bankruptcy will allow you to "avoid" any non-voluntary liens, however if the property owner files bankruptcy you probably were not going to get paid whether you filed a lien or not.

Whether or not the GC goes bankrupt is completely irrelevant.

Another avenue is to find out if the GC has a performance bond, and if so you can file a claim on that too, but get a lawyer to help you with that angle.

 

[SmithBuilt]

What about a lease situation where the owner is not involved in a tenant upfit?



ITO you should spell check your sig line.

 

[growler]

What about a lease situation where the owner is not involved in a tenant upfit?

The owner is always involved, it's his building. It's in his best interest to make sure you are paid. The lien will be against their property.:grin: :grin:

Every time I have ever done a job at a mall it's the mall management that wants proof of insurance and lien waivers.

The GC had better have the consent of the owner (management company) before doing any work.

 

[ITO]

Simons properties who owns lots of malls and strip centers throughout the country has very harsh language in their lease contract for tenants regarding liens, and woe be the GC who incurs a lien while doing a build out; Simons punishes them without mercy and in some cases even bans GCs who don't follow their rules.

My sig line looks fine, but I am dyslexic and uneducated so any help would be appreciated.

 

[SmithBuilt]

uneducated

I know better than that.

Maybe I need the help. After thinking about it spellcheck would not help.



Shouldn't it be "word sense" instead of "work sense".



So if a lien is filed on the property, but the upfit is being paid for and done by the tenant why would the property owner pay anything? It looks to me like the property owner would/should not be liable for a tenants problems.

 

[ITO]

Shouldn't it be "word sense" instead of "work sense".

So if a lien is filed on the property, but the upfit is being paid for and done by the tenant why would the property owner pay anything? It looks to me like the property owner would/should not be liable for a tenants problems.

Thanks, I really am just a poor dumb electrician from West Texas...well maybe not really so poor anymore but I still cant spell.

In regards to your question, it actually it makes sense if you take into consideration any work done to a property is technically considered an improvement to that property, so if an improvement to a property is not paid for, then then parties owed can file a lien against that property.

The property tax base for a shell building is considerably lower than a finished out retail space as well, and generally the property is re-appraised after final inspection of the builds outs.

Most commercial lease contracts also state explicitly that any improvements done becomes the property of the building owner as well, which I have seen get very messy when a restaurant vacates a lease space and thinks they can remove their vent hoods and other items that were built into the shell. (It was a great deal for me, I got paid to cut it loose then paid to hook it back up.)

Real estate law can be a odd at times, but there is a sort of logic to it.

 

[sparkfree]

I don't if this will help, but if they try to get another person to finish,we have called inspection dept, shut the job down,and got response and money.good luck

 

[growler]

So if a lien is filed on the property, but the upfit is being paid for and done by the tenant why would the property owner pay anything? It looks to me like the property owner would/should not be liable for a tenants problems.

A permit is issued to the owner of a property and not the tenant. The name of the tenant ( business name ) will appear on the permit but this is more to help the inspector find the place. As far as I know a tentant can't legally even do any improvement to a property without the owner's permission.

Just because the tenant agrees to pay for the cost of the project that doesn't really mean anything. The project is still the responsibility of the owner. It's his property and he has control over it.

If you do any commercial work for a tenant you really need a space on your contract for both the tenant and the owner/agent to sign if you are the GC. As an electrical sub my contract is with the GC.

 

[SmithBuilt]

Just because the tenant agrees to pay for the cost of the project that doesn't really mean anything. The project is still the responsibility of the owner. It's his property and he has control over it.

I see your point. But don't think the owner should be financially liable for a tenants upfit. I'm estimating a project for a tenant and/or owner now and after this thread I will find out how it works in NC.

If you do any commercial work for a tenant you really need a space on your contract for both the tenant and the owner/agent to sign if you are the GC.

I do now, that's something I had never thought about before.