When Contractors Fail to Pay Subcontractors Part 2
The payment process of a construction project is a sensitive topic of discussion for owners, contractors, subcontractors, and suppliers alike. As experienced Orlando construction attorneys, we understand the concerns of owners which include overpaying contractors as well as the threat of liens being placed on the property in the event a contractor fails to compensate subcontractors. Visit Part 1 to read the first half of the article.
Solutions For Owners
Being cognizant of the things that could wrong will help you to be more proactive in your efforts to secure your property. The following are solutions to help prevent payment issues:
- Hire an attorney to draft your contracts
- When looking for a contractor, ask for references
- Confirm that they licensed, registered, and insured
- Check work progress throughout the construction operation
- Ask workers and suppliers if they are being compensated appropriately
- Request that subcontractors and suppliers sign a lien waiver
- Keep complete and accurate receipts and records of payment, for example, ask for the receipt for material purchases
Drafting a Contract
Even if you do the suggestions above, it is still possible that the contractor may still default. This can very likely result in a lien being placed on your property and you could end up paying twice for the same work. This is why it is important to hire an attorney to draft a contract with specific language and key provisions that will protect you in the event the contractor defaults. Payment clauses, indemnification clauses, and termination clauses are a few areas owners should pay close attention to.
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.