Received bill from sub-contractor after paying general contractor in full

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WaffleCone
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Received bill from sub-contractor after paying general contractor in full

Post by WaffleCone » Tue Nov 05, 2019 1:01 pm

I can't believe I'm in this predicament! Getting a signed letter absolving me of future claims was on my list but I was so happy to finish the project I just wrote the final check. I didn't want to hold up payment with a "formality". It was late on a Friday when the GC completed the punch list and the worker was expecting to pick up a check that day. To someone who's not legal minded, making them wait for a "release of claims" makes it sound like I'm going to be difficult with payment. They were done so I paid.

NOW, 3 months later I get a bill from the HVAC sub with a $1000 balance. UGGHH!!

Quick background... I did a roughly $100k renovation. Part of the job was an a/c system, laundry room, and bathroom. GC paid the HVAC sub for the a/c but not the bathroom and dryer vent fans, concrete hole cutting, or related duct work. That was in the original scope of work. Additionally, an extra $4-500 of work quoted by the HVAC sub was to be done and billed to the GC as part of the project. All parties on board with the extra work.

I made my final payment to the GC plus an extra $500 for the HVAC extras. To muddy the waters, the final invoice from the GC did not have all the charges, which I was aware of. He told me what the extras were, I agreed, and paid them in PLUS the $500 HVAC amount.

I'm hoping this is just a mistake. I put a call in the GC who has been honest with my previously. They are still in business and did an excellent (albeit slow) job. I want everyone to get paid, don't want to stiff anyone for work they did. If there's a legitimate balance then I will pay. But the HVAC invoice doesn't show my $500 payment at all and IS showing stuff I shouldn't be paying for.

Not sure how I should handle this if GC does not pay. Pay the sub and go after the GC? Call HVAC and let them know what's going on?

Grt2bOutdoors
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Re: Received bill from sub-contractor after paying general contractor in full

Post by Grt2bOutdoors » Tue Nov 05, 2019 1:08 pm

Wait to hear back from the General Contractor. How long has it been since you contacted them?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Random Poster
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Re: Received bill from sub-contractor after paying general contractor in full

Post by Random Poster » Tue Nov 05, 2019 1:13 pm

The proper answer is state dependent.

Some states have lien holdback statutes, some states have statutes that say that you have no liability if you pay the GC and owe nothing at the time the sub submits a notice of lien to you, other states have a combination of the two, and I'm sure some states have statutes that say something completely different.

So find your state's mechanics and materialman's lien statutes and read them.
Last edited by Random Poster on Tue Nov 05, 2019 1:15 pm, edited 1 time in total.

HomeStretch
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Re: Received bill from sub-contractor after paying general contractor in full

Post by HomeStretch » Tue Nov 05, 2019 1:14 pm

You might want to do a little legwork to see what this $1k invoice is about to ascertain whether:
(1) the GC didn’t pay the sub for work approved and performed (and find out why), or
(2) the sub is trying to bill an additional $1k (and find out why and does the sub have a signed change order approving the work), or
(3) if there is a bookkeeping discrepancy between what the GC paid and what the HVAC sub received.

Keep it low key until you get your answers. If it’s #1, it is an issue for you if sub can put a mechanics lien on your home. Hopefully there aren’t more unpaid suppliers or subcontractors.

megabad
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Re: Received bill from sub-contractor after paying general contractor in full

Post by megabad » Tue Nov 05, 2019 7:12 pm

I agree with keeping it civil until getting clarity from the GC. it could be a mistake as you indicated. If so and he confirms and it goes away, I would immediately ask for a copy of all the subcontractor lien wavers from the GC and ask for one from him as well. Next time do this prior to paying retention. It is standard practice for large projects where I live if you use a reputable GC. As other posters indicated, this may be state dependent though.

batpot
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Re: Received bill from sub-contractor after paying general contractor in full

Post by batpot » Tue Nov 05, 2019 9:14 pm

3 months later is nuts.
Contact GC first. Hopefully they make it right. Mine did.

LawEgr1
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Re: Received bill from sub-contractor after paying general contractor in full

Post by LawEgr1 » Wed Nov 06, 2019 1:38 pm

I deal with this often. Generally, it isn't a concern, but there are some things to look out for. A few posters have touched on it.

Homestretch referenced #1 as the one to look out for. This is only the case if it is legitimate, approved work that was either within the original scope or an approved change order. This is completely dependent on your contract documents with the GC, and therefore, shall be handled DIRECTLY with the GC.

You owe the sub-contractor nothing. Contractors, all the time, try to bill for things that were not a part of scope, "feel" like they should be compensated for, or "do you a favor" and then bill you later although it wasn't approved.

Reference your contract. Talk to the GC, it's his sub, not yours.

"Manage to the Contract"

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dm200
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Re: Received bill from sub-contractor after paying general contractor in full

Post by dm200 » Wed Nov 06, 2019 1:45 pm

Others might comment - but I think I might contact the sub-contractor and get some details on this bill. Such information might help the GC figure it out. :D

On the scale of a $100k total contract, this is minor - but $1,000 is still $1,000!

I think (do not know if applicable) I might be concerned that this $1,000 could surge upward if late fees, legal/collection fees, interest, etc. become involved.

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unclescrooge
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Re: Received bill from sub-contractor after paying general contractor in full

Post by unclescrooge » Wed Nov 06, 2019 1:45 pm

Do you have a signed contract with the subcontractor?

If not, I didn't think the sub can do anything.

In order to file a mechanics lien, I'm pretty sure he needs
1. A signed contract
2. A state license
3. Needs to file within 90 days

At least this is my understanding of California.

Topic Author
WaffleCone
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Re: Received bill from sub-contractor after paying general contractor in full

Post by WaffleCone » Wed Nov 06, 2019 2:47 pm

I don't have a written contract with sub.

Any change orders with the GC were verbally agreed on despite the signed contract saying they needed to be in writing. This hasn't been an issue with this GC in the past. The original contract plus the extras (hvac and otherwise) were all paid, but the amount paid is higher than the amount billed due to the extras not having a contract.

I believe PA has a 6 month window for a lien. The invoice I was sent from the sub has a date of Sept. but a postmark of Nov.

Still waiting to hear back from GC. Going on day 2.

LawEgr1
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Re: Received bill from sub-contractor after paying general contractor in full

Post by LawEgr1 » Wed Nov 06, 2019 4:17 pm

A few comments:

Re-read the initial post. Sounds as though you expected changes from the project from the HVAC sub. If so, and you would have approved them anyway in writing, then this entire thing is based on how the sub contractor quoted the work to the GC & that you should've been aware on how it was quoted (fixed price or T&M). If T&M, it could've actually come in higher, this is legitimate, you would've approved anyway and therefore the general contractor should've notified you asap for you to pay.

This should be handled by the GC with his sub, but given you approved some changes, just do a thorough examination on what the additional costs are with respect to your changes and validate / invalidate. Keep in mind you don't have to pay 0% or 100%.




Like investments, past performance with contractors is no indication of future success. Sounds harsh, but they'll take your shirt right off you if it's allowed. Therefore, all projects must be treated in accordance with the contract to assist in avoid situations like this. (not belittling your situation, but at least it's $1k and not, $10k, $50k, etc.)

You'll plow through it!

EDIT: I re-read initial post to make this more valid

Winston19
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Re: Received bill from sub-contractor after paying general contractor in full

Post by Winston19 » Wed Nov 06, 2019 8:45 pm

You will want to look at your state's mechanic's lien law. Often there is a requirement of notice from the sub before the work starts plus a notice requirement to assert a claim. If you determine sub did not give the notice then it is the GC's problem.

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dm200
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Re: Received bill from sub-contractor after paying general contractor in full

Post by dm200 » Thu Nov 07, 2019 11:09 am

Winston19 wrote:
Wed Nov 06, 2019 8:45 pm
You will want to look at your state's mechanic's lien law. Often there is a requirement of notice from the sub before the work starts plus a notice requirement to assert a claim. If you determine sub did not give the notice then it is the GC's problem.
This is my understanding as well.

atikovi
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Re: Received bill from sub-contractor after paying general contractor in full

Post by atikovi » Fri Nov 08, 2019 8:55 pm

You didn't contract with the sub for the work. Tell him to go pound sand. After 3 months he could be scamming you. What's he going to do? Get a lawyer and sue you? That will cost him a lot more. Take you to small claims? Judge will ask to see the contract you signed with him. When he can't show it, case dismissed.

Winston19
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Re: Received bill from sub-contractor after paying general contractor in full

Post by Winston19 » Fri Nov 08, 2019 9:10 pm

atikovi wrote:
Fri Nov 08, 2019 8:55 pm
You didn't contract with the sub for the work. Tell him to go pound sand. After 3 months he could be scamming you. What's he going to do? Get a lawyer and sue you? That will cost him a lot more. Take you to small claims? Judge will ask to see the contract you signed with him. When he can't show it, case dismissed.
If the sub can assert a mechanic's lien pretty much everything you said is incorrect. He can sue and at least in my state also recover attorney's fees. The whole point of the mechanics lien laws is to protect subs because they don't have a direct contract with the owner. The sub certainly may not have followed this process, but until you determine that this is not something you can ignore.

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