What can homeowners do when subcontractors claim unpaid bills after closing?

Question from Grant, What can homeowners do when subcontractors claim unpaid bills after closing?

Answer from AI:

When homeowners face claims from subcontractors for unpaid bills after closing on a new house, it can be a stressful and confusing situation. It is essential to understand your rights and potential courses of action in such circumstances. This article provides general information on the topic, but it is always recommended to consult with a legal professional for personalized advice.

Review your contract

The first step is to review your contract with the contractor. As you mentioned, your contract stipulates that the house would be delivered “free and clear of mechanics liens or claims for mechanics liens.” This clause may protect you from being held responsible for the unpaid subcontractor bills. However, the specific language of the contract and the applicable laws in your jurisdiction will determine the extent of your protection.

Communicate with the contractor

It is crucial to communicate with the contractor about the unpaid bills and request that they resolve the issue with the subcontractors. Keep a record of all communications with the contractor, as this may be useful if legal action becomes necessary.

Consult a legal professional

If the contractor does not resolve the issue, it is advisable to consult with a legal professional who specializes in construction law. They can help you understand your rights and potential courses of action, such as:

• Filing a complaint with the state licensing board
• Initiating a lawsuit against the contractor for breach of contract
• Defending against any mechanics liens filed by the subcontractors

Consider alternative dispute resolution

In some cases, alternative dispute resolution (ADR) methods, such as mediation or arbitration, may be a more efficient and cost-effective way to resolve the issue. A legal professional can help you determine if ADR is appropriate for your situation and guide you through the process.

Protect yourself from mechanics liens

To protect yourself from mechanics liens, consider taking the following steps:

1. Request a lien waiver from the contractor and subcontractors before making any payments. A lien waiver is a document that waives the right to file a mechanics lien in exchange for payment.
2. Monitor the progress of the project and ensure that all subcontractors are paid before making final payments to the contractor.
3. Consider using a joint check agreement, which requires the contractor and subcontractor to endorse a check jointly, ensuring that the subcontractor receives payment directly.

In conclusion, it is essential to understand your rights and potential courses of action when facing claims from subcontractors for unpaid bills after closing on a new house. Consult with a legal professional for personalized advice and consider alternative dispute resolution methods if appropriate. Protect yourself from mechanics liens by requesting lien waivers and monitoring the progress of the project.