Legal Question in Construction Law in California

Our business did a big job my husbands bid/contract ran short on funds. We were able to pay all except one subcontractor. There has been little or no work to be able to pay the sub. My question is if we started making monthly payments of any amount would the sub be able to sue us? For instance the amt due is $19k and the payments might be around $250p/m???? What are the consequences??


Asked on 10/15/09, 9:40 pm

1 Answer from Attorneys

Why do you need new work to pay subs for work already done? Why wasn't the sub paid when the owner paid you for the job the sub worked on? I won't even go into how many laws your husband broke by not passing through payments to the sub. As a licensed contractor your husband should already know them.

After 22 years in construction law, it never ceases to amaze me how many contractors think it's OK to spend the money the owner pays for one job, and then count on the next job to pay the subs on the last job. On top of all the Business and Professions Code and Civil Code violations, that's nothing but a ponzi scheme.

With that said, to answer your question: it's up to the sub whether or not they will accept payments. You may as well try to work it out with them. If they won't accept payments, however, not only can they sue you, they can record and sue to enforce a mechanics lien against the owner. Then of course the owner will sue you too.

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Answered on 10/16/09, 1:45 am


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