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Old 07-17-2009, 04:17 PM   #1
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Pay contractor or subcontractor?


Hello everyone,

I've encountered another unique situation with my GC. He's requesting that I give $ to the subcontracting crew that he's sending over, instead of paying him and letting him do with it whatever he does. Supposedly, he is trying to avoid the drive over here. Is this normal? I'm totally uncomfortable with it, but he also previously asked me to not even talk to them so that makes it even more awkward. Thoughts?

PS - How do I send PMs?


Last edited by he1en; 07-19-2009 at 01:38 PM.
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Old 07-17-2009, 04:45 PM   #2
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To send a pm you need a min. number of post. I'm not sure of the numbers, but 10-20 are required.

To answer the first question, that is indeed strange.
When I work for a HO, I get paid from them. When I work for a GC, I get paid from them.
I would never appect payment from a HO to give to a GC, so he can turn around and pay me.

Yoou have to decide what you're gut is telling you on this one.

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Old 07-17-2009, 04:50 PM   #3
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He1en,

Do you have a contract with the subcontractor? Do you have insurance certs fron the subcontrator?

If you do not have the above do not pay the subcontractor. Paying them directly could jeprodize insurance issues, could jeprodize your contract with the GC, could remove any lien rights you may have.

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Old 07-17-2009, 05:15 PM   #4
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Thanks guys. I think this is going to have to be one for small claims and a nice chat with our licensing bureau. I don't know if their subcontractors are licensed, as we have specific instructions not to talk to them. The GC has both asked me to not speak with the subcontractors and also pay them directly, in one fell swoop. What am I missing here?

Our contract specifically states that we are to pay the balance upon completion of drywall, but of course he is now saying that I'm going to have to be the one to provide all of the materials? How is that even legal? The contract is between me and the GC, he sent the subs over, I have no idea who they are.

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Old 07-17-2009, 05:49 PM   #5
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Where did you find this GC, on Craigslist? This whole scenario sounds strange to me. As a sub, I always get paid through the GC, unless there is additional work not related to the original project that the homeowner wants done. Even then we usually still bill through the GC. Sounds like this GC may be in some big financial troubles.
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Old 07-17-2009, 06:20 PM   #6
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My money is on the "GC" not having proper insurance, and the sub being told that the GC had it covered.
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Old 07-17-2009, 06:57 PM   #7
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Yes, CL - new to the area and have noone to ask for a recommendation. Ugh. I'll ride this out for the next few days and will let yall know how it goes. Can't thank you enough!
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Old 07-17-2009, 07:04 PM   #8
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So you are supposed to pay a sub without talking to them ?
Make SURE you get a receipt
I would also INSIST the GC send you this request in writing
Fishy indeed
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Old 07-17-2009, 08:06 PM   #9
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Did you ever call your State's Department of Licensing to verify the Contractor is licensed in YOUR State? Most State's have a free web site to check on any contractor or sub's license. He should also have given you Proof of Insurance which you called to verify that it is current.

My State also requires we give the homeowners (if you take an addition loan) a Right to Rescind document (3 day think about it period) they have to sign before the Contract is valid or we start any work. Also required is a lead pamphlet from the EPA, and a Notice of Right to Lien paper, to explain that the General Contractor can say he paid his suppliers but didn't and they can lien your house to get paid by you.

Not to scare you but this is getting out of hand. Call your States Labor and Industries or Department of Lic., or Attorney General to get the ball rolling. Do not pay the subs. Meet with your General and take notes or inform him of the tape recorded being used. Document everything now, for small claims court later. Do not let the money get too far ahead of the work done. Be safe, G
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Old 07-17-2009, 08:57 PM   #10
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Hi GBAR-

I did some of that. I called our licensing agency and checked on whether any complaints had been filed (there weren't) and also checked the BBB (I know that's worthless but I checked anyway). I also confirmed that their licensing was current and active in our state.

No loans were taken and this is a relatively small job (under $6k total) We've already had ~$4k of paid, OK work done, are owed ~$1k in parts (that he say will be installed after the subs are done), and owe ~$1k at the end of the subs work. Work started more than 3 days after our contract was signed and things were fine until the past week. I've paid 100% on time and according to our contract (even early once) and sent him an up-to-date financial reconciliation today which he did not dispute. I'm trying to document everything via email, all of his emails have his company signature in them, and I also have our signed contract. He's kind of dumb and the emails state his requests that break contract terms, and I've followed the contract to the T. I've covered myself as much as possible, he's just ridiculous and horrible to work with. I'm documenting EVERYTHING (I have spreadsheets and have even started a 'blog' to add in commentary if necessary), was stupid enough to make payments in cash but have withdrawals that coincide with their emails and payments perfectly, and will keep on doing all I can to cover my butt, but will use checks and get receipts going forward IF it ever gets to another payment point.

I did not receive a Lead EPA pamphlet nor did I receive a notice to lien form (although I think the guys he sent over here may be, hm, how do I say - illegal?)

I've already contacted the licensing board and know what steps I need to take if I decide that is necessary. I would meet with the GC, but he doesn't answer my calls, only emails once in a while, and is 'recovering' from his health issue and will not come here. He did say he'd wrap things up AFTER the subs were done, I have that in an email many times over....

Next time, I will come here and solicit contractor referrals from you wise sages . Ah, Friday night fun, right?
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Old 07-18-2009, 08:39 AM   #11
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He1en,
Do not pay the subs directly unless you have a contract with them or it states in your contract with the GC that you are to pay the subs and which subs you are to pay. Definitely do not pay anybody in cash. If you pay the subs without having it documented in writing from your GC and signed by all parties that you are to do so he could turn around and say you owe him money on the contract. I wouldn't recommend tape recording phone coversations until you speak with an attourney about. That may or may not be admissable in court and maybe illegal for you to do.

Balance due after completion of drywall doesn't hold water if phase 1 and 2 are still not complete and have been paid for. If the contract stated your contractor is resposible for labor and materials you are only responsible for materials that specifically say something like: 1 bathroom light fixture supplied by property owner/ home owner. Most form contracts (what a lot of contractors use) state the contractor is to supply both labor and materials. Issue no more payments until the work that has been paid for is completed.

What ever you do start documenting everything in writing, the longer the paper trail you have, the better off you will be. Get all parties invloved to sign any paperwork, notes, receipts, and addendums. I am sorry you have had such a rough time of this. It's guys like this that give the rest of the industry a bad name.

As far as liens go, a lien is filed against your property for non-payment for goods and/or services. You will not be able to file a mechanics lien against him. However he or his subs and suppliers can file liens against your property for non-payment. Another reason to never pay in cash. Lien law is very complicated and should be left to an attourney specializing in lien and/or contract law. If you have paid him in full and he has not paid his subs/suppliers and they file liens you will have to sue him. The subs/suppliers are within thier legal right to place a lien on your property. That is the last resort they have to get payment.
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Old 07-18-2009, 02:06 PM   #12
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Suggest you casually add mention of your dogs and security cameras/alarms in conversations and emails.

I actually DO have each of the above -- and pointing out the various cameras to seemingly-paroled, inarticulate, workers gives me great comfort (those types of workers were not displayed until AFTER contact signed). I simply smile and offer the workers a friendly caution that "our security system" records their actions AND words -- so don't say anything that's private or embarrassing.

I also take "cute". homeowner-in-awe photos of the ongoing work. Actually, I am documenting the faces of the workers. In the event of later legal issues, offer the contractor "help" in recalling the actual work done. Aid him in recalling the day-to-day progress by showing (copies!) of the workers' photos -- and mention that his tax filings (Disbility, Unemployment, State. Fed) for those workers should help jog his memory about which of his crew can discuss their experiences at YOUR job site.
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Old 07-18-2009, 04:39 PM   #13
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Not for nothing, but could he have wanted you to give the man in charge of the subs the final check to save him a trip?
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Old 07-18-2009, 05:19 PM   #14
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He1en: No no no no no no no no and NO! Your story made the hair stand up on my arms. If you live in Michigan, I could swear we have been dealing with the same general contractor. The same sort of thing happened to us...even the "don't talk to the sub" demand. Long story short, the general demanded the final $ before it was done, took a hike when we told him we'd pay him "upon completion" like the contract said. The project was supposed to be done in a couple months at the MOST. That was almost 3 years ago and it is still unfinished. We've been dealing with attorneys and the state...BIG nightmare. I suggest finding a construction attorney and asking them what you should do...and/or call the local building association or something. Egad...I see a cliff ahead!
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Old 07-19-2009, 07:58 AM   #15
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Just a quick note. Not every contractor is like this. The bad apples do cause a stink, though.

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