Posted by Linda Porter on January 31, 2010 at 5:52am
Back in April, I completed a small subcontracting job for LHP Contractors. Job was completed in full as requested, photos, invoice and documentation were all submitted as requested. I even bid on the larger repair jobs to be done. Emails were exchanged but I never received payment. Then my emails starting being ignored as were my phone calls. I was busy trying to get my company going and put it aside for a while. In November, I made another attempt even faxing the "president" of the company....no reply. I was able to obtain the primary contractor who LHP was working for and contacted them. They immediately contacted LHP, sent copies of their paperwork showing they had paid LHP' invoice and ask for assistance in getting me paid. LHP gave them the same gibberish they gave me but seemed very willing to make sure the situation was resolved. I thanked the contractor and contacted LHP again....no results and ignored again. Although I hated to, I contacted the primary contractor again. They said they had done all they could do and were no longer working with this subcontractor. Any suggestions on collecting my funds? Please pass the word...I don't want LHP Contractors taking advantage of anyone else!! Thanks!!!
I don't want to be a buzzkill here, but in most states you only have a few months in which to file a mechanics' lien after not being paid. Your window of opportunity for filing the lien may have already passed you by. That doesn't mean you're completely out of luck on getting paid; all it means is that you won't have a lien on the property to secure your payment by the owner of the property. If it's too late to file the lien, you can still sue the subcontractor who refused to pay you . . . but there's no security behind that lawsuit, and if they're out of business or bankrupt or don't have the funds to pay you if you win the suit, you're outta luck.
You should have a conversation with a construction or real estate lawyer ASAP to make sure you get your legal claims filed before the statute of limitations runs out. You can ask a fellow contractor for attorney references, or you can call your state's bar association, describe your issue, and ask them to make a referral for you. If you're owed less than $10,000, you might want to file your own suit in small claims court because the cost of hiring a lawyer may not be worth the potential recovery. You can find out about how to file your own small claims action by going on the web and searching for "small claims [your state]" and see what's involved. Good luck!
My first question would be if the asset you did the work on is currently an REO property and has reverted back to the bank? If you do not know, go to your county courthouse and find the status on the property. If you only know the address and not the tax ID number someone at the courthouse can help you find it. Once you find out who the "owner" of the property is contact them directly. The "bank" doesn't want any surprises when they are about to have a closing and a mechanics lien is a large surprise at the closing table. I worked for an REO asset company that I was having "communication problems" with. Needless to say within a month they were closing their doors. The bank took over the handling of the asset and after submitting invoices again I was promptly paid. Make sure you have all your ducks in a row. Initial bids, invoices, before and after pictures and copies of any emails you may have. I hope this helps.
Thank you both...MeLisa I'm in Texas but the property has apparently already been sold to another owner. Can I still file a lien? I was thinking about contacting a collection agency so it would go on the company's credit but had not thought about the bonding company. Do you know how I would find out what bonding company carries their protection? The amount is very small...a little over $200 but 1) to a starting company, every penny counts and 2) it infuriates me that a big supposedly reputable company would do this...I don't want it to happen to other companies. Jesse, wouldn't it cost me more to go through small claims than they owe me? Thank you both again....I have never had to deal with this type of thing before!!
I don't know what state you're in, but here in Texas, you would have every right to file a Mechanic's & Materials Lien against the property you did the work on.
This will definitely get the attention of the contractor because now the property owner is involved. It doesn't cost much and the lien would have to be filed in the County Courts; but this should get you results.
Check with your state's laws to see how subcontractors can be paid when the Generals won't pay.
Another alternative is to file a claim with his Surety Bonding Company (if they are bonded), that will get you results as well, because the bonding company will have to pay you.
Comments
You should have a conversation with a construction or real estate lawyer ASAP to make sure you get your legal claims filed before the statute of limitations runs out. You can ask a fellow contractor for attorney references, or you can call your state's bar association, describe your issue, and ask them to make a referral for you. If you're owed less than $10,000, you might want to file your own suit in small claims court because the cost of hiring a lawyer may not be worth the potential recovery. You can find out about how to file your own small claims action by going on the web and searching for "small claims [your state]" and see what's involved. Good luck!
I don't know what state you're in, but here in Texas, you would have every right to file a Mechanic's & Materials Lien against the property you did the work on.
This will definitely get the attention of the contractor because now the property owner is involved. It doesn't cost much and the lien would have to be filed in the County Courts; but this should get you results.
Check with your state's laws to see how subcontractors can be paid when the Generals won't pay.
Another alternative is to file a claim with his Surety Bonding Company (if they are bonded), that will get you results as well, because the bonding company will have to pay you.
Let me know what works.