Are we on the hook for a subcontractor?

January 10, 2023 9:46 AM

about 18 months ago we got an insurance payout to fix our roof, we foolishly paid in full to a company who then kept pushing the date they were going to do it back over and over. After almost a full year, (the amount of time the job needed to be done in by our insurance), they farmed the job out to a subcontractor. The contractor didn't pay the subcontractor and they're billing us for the amount we paid initially. Given that we didn't hire the subcontractor are we on the hook for any of this?
posted by Ferreous to Home & Garden (2 answers total)

Unfortunately, yes.

(Assuming United States Here)

When a subcontractor is not paid, but completed the work, the value of their work has increased the value of your property. Therefore, the property owner is responsible for payment - even if a shady contractor in the middle runs off with the bag. Your situation is so unfortunately common that all states have laws where subcontractors can legally compel property owners to get paid.

The subcontractor has legal right to put a Mechanic's Lien on your property - this may show up on the title to the home indefinitely. My limited understanding of real estate transactions is that having a recent lien, even if paid off, is a Very Bad Thing. If unpaid, the lien will make it impossible to sell or borrow against the property, and the subcontractor could attempt to foreclose on the property to get back the value owed.

However, it is not a good idea to pay the subcontractor as then they have no interest in attempting to get the money from the original company. You may want to contact the subcontractor and tell them you are trying to get the company to make good on their payment to get some pressure off.

You may need to get a lawyer - but at the least I would begin an aggressive campaign of communication to the company demanding they make good on the subcontractor bill - or return the money. Lookup commercial dispute procedures in your state. Here are some options:

- Write a 30 day demand letter (if you still have 30 days before lien starts) to company demanding payment
- contact state attorney general
- contact board of licensing for your city/state/town to attempt to get company's contractor license revoked
- contact the company and describe that you will state the facts (facts only) about their failure to perform on google, yelp, facebook, instagram, better business bureau, state attorney general, licensing official, and will continue posting until the sub is paid, and then and only then will you remove posts.
- contact a civil attorney about writing a letter (sometimes the scary lawyer stationary can work wonders for much less $$$ than hiring someone to bring a lawsuit
- look up small claims court monetary limits - consider bringing an action in small claims court yourself if the amount is small enough
- engage an attorney to file suit to get the money from the company (unless this is a huge roof - this option will be very expensive

Be persistent in communication but avoid anything that could be construed as harassment.

I had a landlord/friend who had this happen to them and unfortunatley, the money was gone on gambling and booze. He ended up working out a deal with the subcontractor but still lost money in the process. I hope your situation has a better outcome.
posted by sol at 10:47 AM on January 10, 2023 [7 favorites]

Response by poster: Just a followup after marking the thread solved. While the mechanic's lien issue is a thing, based on the statute in MN I think I'm free and clear due to the time frame in which the subcontractor would have had to inform via certified letter that they intended to pursue a lien having passed long ago.
posted by Ferreous at 10:06 AM on January 12, 2023