Construction Law

Is an Owner or Contractor Refusing to Pay You for Completed Work? featured image

Is an Owner or Contractor Refusing to Pay You for Completed Work?

A recent survey conducted by the Associated General Contractors of America reveals a startling picture of a construction industry impaired by coronavirus disease 2019 (COVID-19). “Owners are not only halting many current construction projects but are canceling a growing number of projects that have not yet started,” said AGC’s chief economist Ken Simonson. Unfortunately, the financial troubles that are caused by project shutdowns can only trickle down from owners to contractors to subcontractors and material providers. 

In this brief article, a Charlotte construction lien attorney with our law office discusses what you can do to retrieve owed payment on a project hindered by the spread of COVID-19. Although the spread of COVID-19 is unprecedented, payment disputes are anything but uncommon in the construction industry. 

Review Your Contract

Your first step is to review your construction contract. If an owner is refusing to pay you it is likely that they either don’t have the funds or don’t think they’re responsible for paying due to delays caused by COVID-19. Although contracts generally protect contractors from unforeseen circumstances like COVID-19, “no damages for delay” clauses and similar provisions could leave contractors on the hook for additional costs. We recommend consulting one of our attorneys to determine if an owner is responsible for paying you during these uncertain times. 

Related: The Key Contract Provisions Needed to Combat Coronavirus

Draft a Demand Letter

Once it’s been established that an owner or general contractor owes you for completed work or provided materials, your next step is to have your attorney draft a demand letter. A demand letter is often all that’s needed to emerge from a payment dispute. Once a party is presented with irrefutable evidence that they owe payment and that litigation is a real possibility, they generally back down. However, in the event that the party you’ve contracted with absolutely refuses to pay you, your next best option is to file a mechanic’s lien with the aid of a Charlotte mechanic’s lien attorney

Related: Lien Deadlines in North Carolina

File a Mechanic’s Lien 

A mechanic’s lien is the perfect tool for retrieving owed payment, especially as owners across the industry face bankruptcy. Even if an owner declares bankruptcy, a mechanic’s lien can still ensure that you receive what you’re owed because a mechanic’s lien attaches to the property, not the owner. Essentially, the property can’t be sold until the lien is removed. As is the case with every state, North Carolina has its own set of mechanic’s lien laws that must be adhered to. We recommend consulting a Charlotte mechanic’s lien attorney with our law firm to ensure your lien is filed in a timely and proper manner. 

At Cotney Attorneys & Consultants, we found that contract review, demand letter drafting, and mechanic’s lien filing were among our most sought after services. It made perfect sense to offer these services for a low monthly fee. For access to unlimited contract review, unlimited demand letters, and unlimited lien claims, look into our affordable, monthly subscription plans. 

If you would like to speak with a Charlotte construction lien attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.