We hired a contractor & paid him in full. We have a signed contract showing payment made and a balance due of $0. The contractor didn't pay his subcontractor in full (owes him $2000). The subcontractor has no written contract with the contractor for the work he did on our house. Can the subcontractor file a lien against our home without his own proof of contract specifying the work he was to do and what he was supposed to be paid? We don't want to see the subcontractor not receive wages rightly owed, but we don't want a lien on our house and have to pay twice either.
If the subcontractor eventually gets paid, how do we get a lien release and from whom?
If the subcontractor sent you a "Notice to Owner," you may very well be on the hook and have to pay twice, unless your contractor provided you with a release of lien from the subcontractor. If one subcontractor was not paid, it is likely that others were not paid as well, and you may have a much larger set of issues to deal with. You need to consult with a good construction lawyer to review the facts of your case. Please feel free to call my office for a review.
Lien rights also stem from an oral contract or a contract implied-in-fact ("Quantum meruit"). Therefore, whether or not the subcontractor had a written contract is of no effect. Proper and timely service of a Notice to Owner ("NTO") is a prerequisite to perfecting a subcontractor's lien. If you did not receive a timely NTO, then you have a complete defense. if you did receive a NTO, then your contractor should have received a copy as well. Your contractor has an independent duty to ensure that the funds received from you are paid to its subcontractors. Your contractor may have misapplied construction funds, which could be detrimental to his state license. You have options here. Consult with a Board Certified Construction Law Attorney.
Most states' contractor licensing laws require that a icensed contractor have a written contract and without one, he cannot enforce a payment claim. The subcontractor could still attempt to file a bogus lien, but a local attorney should be able to get it expunged. Another option is to obtain a bond to get the lien released. A third option, perhaps less palatable, is to go to court to force the general contractor to pay is sub. Check your contract with the general contractor to see whether it has an attorney's fees provision; if so, the general contractor could be forced to ay tytour attoorney's fees if you have to go to court.
Given the relatively modest amount in dispute, you can also take the general contractor to small claims court (no lawyers) too get the $2000 back from him in order to pay it to the subcontractor. That may be the easiest (if you can get the subcontracgtor to hold off on recording his lien-he has a limited time to record it, and may want some kind of written promise to pay from you before he waived his lien rights). If you sign such an agreement with the subcontractor, make your obligation to pay him coontingent upon your having recovered from the general contractor.