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This is second request on a project that Owner has not paid a subcontractor draw request.

IdahoLien Waivers

I'm the General Contractor working for a client who is acting as the Owner/Builder. Client is from California and a past developer of Condominiums. The issue is the subcontractor working for me has completed the foundation work. The work is not satisfactory to my client, and he represented to me that Trustee and local attorney feel that the delays caused by the concrete contractor and the sub-par work has caused them to balk on a $6677 payment. The subcontractor and all the material suppliers have signed Conditional and some Unconditional releases (over kill and mounting paperwork). The subcontractor in good faith signed the Conditional and we thought payment was being made, but client came back and wanted Unconditional Releases from this subcontractor now with no payment. This has created the concrete people to start texting me threatening texts, inflammatory emails, etc. I have requested the Client to put in writing WHY no payment, as well as if a "holdback" is warranted so the subcontractor can be paid what is not in dispute, to alleviate the threats, as I will probably give the Police department a heads up on these texts. Client says the Trustee and local attorney have the say, "and it's out of his hands". We were never told there was a Trustee involved before we signed our contract. Who are we working for, or is this a reuse? We told Client if this is not resolved immediately, and some sort of payment is not received by this sub. We will not move forward in our contract and will not be onsite next Tuesday. I feel this problem in the early stage of construction is not a good sign. Client borrowed $450,000 and to date about $38,000 has been paid to the excavator and the concrete contract. Thx for your assistance. forward on our contract to do the framing

1 reply

Jun 22, 2018
I'm sorry to hear about that. First, it's completely understandable that an unpaid sub or supplier would not want to submit an unconditional lien waiver before payment as been made. If payment isn't forthcoming from an owner/developer and lower tiered parties are growing frustrated, it might be wise to discuss that with the developer and indicate to them that as lower-tiered parties become more frustrated, a lien filing will become a more realistic possibility. If payment issues are bad now, they will only get worse as liens pop up on the job. Stopping work might seem like a good option, but it could also lead to an escalation in the dispute. Potentially, a work stoppage could lead to a breach of contract, compounding legal headaches. Sending a demand letter such as a Notice of Intent to Stop Work could be effective. Sort of like a Notice of Intent to Lien, a Notice of Intent to Stop Work informs an owner that, if payments aren't made, the sending party will cease work on the project. Finally, if all of these issues are occurring at the start of the project, it might be a good idea to try and organize a discussion between the highest tiered parties and other parties down the chain to align the expectations and goals of the job. With issues popping up early in a large project's life cycle, failing to get everyone on the same page could lead to more serious issues at the job continues.
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