Contractor Scam

[mob1202]

Anyone here ever have any experience with a general contractor
who hired sub contractors to come in and do the work and then
never payed them after you gave him the money for the job?

If so, what did you do about it and how did it go?

Thanks in advance...

 

[need boost]

I used to be a general contractor years ago, Your job was to pay me, MY job was to pay subs if I hired them. He hired them, not you, tell them to go after him to get their money! You have done paid it [ unless you hired them for him then you are problely in a mess ] Daniel Ray

 

[Billdogg]

I agree. It's not your problem. Tell the subs to go after the general.

 

[Chuck Leeper]

Nope!

I agree. It's not your problem. Tell the subs to go after the general.

The subs will just file liens, and U R SKREWED...
You should have demanded lien releases for all the work, when you paid him. You have the check in 1 hand, and he hands you correctly executed lien releases, in the other.
How he obtained the releases from the subs is his problem...

 

[mr_nate]

Typically on larger jobs the owner will withhold a 10% holdback until the subs are paid. If it has been 45 days since the project reached substantial performance, then they will not be able to lien the property.
If the contractor released a purchase order for the subs to do the work, then the subs will have to chase him for that.

 

[S2V6RACER]

The subs will just file liens, and U R SKREWED...
You should have demanded lien releases for all the work, when you paid him. You have the check in 1 hand, and he hands you correctly executed lien releases, in the other.
How he obtained the releases from the subs is his problem...

Yep, I have had to file liens and lawsuits against the property owners when scumbag general contractors stole the homeowners and my $$. It gets nasty so hang on.

Chuck is dead on with his advice. If you demanded waivers you would not have this problem. It is your (the property owners) problem now.

 

[S2V6RACER]

Typically on larger jobs the owner will withhold a 10% holdback until the subs are paid. If it has been 45 days since the project reached substantial performance, then they will not be able to lien the property.
If the contractor released a purchase order for the subs to do the work, then the subs will have to chase him for that.

Ha, not in the state of Michigan. We see these dirtbags pull this all the time. I do my part and let them know up front that I WILL be paid and I will file liens/lawsuits so it is interesting how we don't get some of the jobs now and I know it's because they are looking for guys to take for a ride. It's a great scam (General contractors) if you can get away with it.

 

[DIAZ 87]

it sounds like joe the plumber was their

 

[DIAZ 87]

Anyone here ever have any experience with a general contractor
who hired sub contractors to come in and do the work and then
never payed them after you gave him the money for the job?

If so, what did you do about it and how did it go?

Thanks in advance...

that up to the general contractor to pay sub contractor. did you have a permit to due the work.I would call the city
and have an inspector take a look at everthing to be on the safe side

 

[GSX-PKV]

The subs will just file liens, and U R SKREWED...
You should have demanded lien releases for all the work, when you paid him. You have the check in 1 hand, and he hands you correctly executed lien releases, in the other.
How he obtained the releases from the subs is his problem...

Unfortunately, I'm pretty sure this is true depending on your state. I'd seek the help of a lawyer because the subcontractors can place mechanics liens on your property. "Google" mechanics lien for more details.

 

[mr_nate]

Construction Lien Act is separate from a mechanics lien.
Michigan is 90 days to preserve your lien rights.

Typically these companies will put all their funds in a holding company, declare bankruptcy and change names.

 

[need boost]

Yep, I have had to file liens and lawsuits against the property owners when scumbag general contractors stole the homeowners and my $$.

Ted, If the homeowner has a copy of where he paid how can you lein him? I would have thought you would have to go after the general since he is the one that hired you, not the home owner ?? Just wanting to understand that one a little more, seems like the law is pretty crappy if they basically let him [ the general ] steal their money like that. Could he sue the general to get it back if he has to pay twice? Thanks Daniel

nm just found this on the net, man the law sucks for homeowners and makes it easy for crooks to get away with this
Mechanics Lien: What Every Homeowner Must Know to Protect Themselves Against Fraudulent Liens

 

[S2V6RACER]

Yep, I have had to file liens and lawsuits against the property owners when scumbag general contractors stole the homeowners and my $$.

Ted, If the homeowner has a copy of where he paid how can you lein him? I would have thought you would have to go after the general since he is the one that hired you, not the home owner ?? Just wanting to understand that one a little more, seems like the law is pretty crappy if they basically let him [ the general ] steal their money like that. Could he sue the general to get it back if he has to pay twice? Thanks Daniel

nm just found this on the net, man the law sucks for homeowners and makes it easy for crooks to get away with this
Mechanics Lien: What Every Homeowner Must Know to Protect Themselves Against Fraudulent Liens

If the the homeowner has a copy of where he paid the General, then that just might be enough to get the contractor awarded to go to the construction lien recovery fund. It is very rare (per my attorney) that it ever happens (go figure). and it only pays 80k per claim, so that still might not be enough to get your $$ if you are last in line. Bottom line is the homeowner needs to get copies of waivers from contractors paid through the general.

If you do not serve a notice of furnishings to the property owner(s) within 21 days of providing materials, you may not get your $$ for them, but you are entitled to your labor.

In most cases the Homeowner isn't in as bad of a position as you'd think. I'd be thinking about making settlements at this point because odds are it's going to court and the lawyers are the only ones who will come out ahead on both sides.


Joe the plumber is my hero.

 

[gnxtc2]

I don't deal with GCs for this exact reason. I work directly for the owner and get paid by the owner. For you homeowners out there, remember when you hire a GC and he uses subs...the subs are loyal to the GC and look out for his best interest not the homeowner. The homeowner is not paying the sub.

For the business owner, if you're a sub working for a GC, he will never pay you in full. The GC will tell you that he has another job for you and will make it up on that job. It's just a big circle.

Billy T.
gnxtc2@aol.com