What If Your Contractor Doesn’t Pay His Or Her Sub-Contractors?
I’ve unfortunately been witness to homeowners responsibly paying their contractors for the sub-contractor’s (henceforth shortened to “sub’s”) work PLUS the contractor’s markup, only to find out the contractor never paid his or her subs. The subs then have a legal right to put a lien on your home unless you pay them (yes, you pay twice), because your home is the product of their hard work and materials. Not only does this cause problems if you should want to sell your home, but you should expect legal action, AND it gets publicly announced (in Seattle you will find these announcements in the Seattle Daily Journal of Commerce). I mean, really! Who wants his or her name publicly listed as the jerk who didn’t pay (irrespective of the situation)!? How do you avoid this? Make sure your contract with your contractor has a lien release in it. This will protect you from liens in the event that the subs aren’t paid. If the clause isn’t already in your contractor’s contract, please use the G706A-1994 Contractor’s Affidavit of Release of Liens as a supplement.