Legal Question in Real Estate Law in New Jersey

I have not seen your contract so I do not know what it provides covering this situation. Usually there is language about subs, and also remedies if the job is stopped or prolonged. I suggest writing your contractor (certified mail, return receipt requested) informing him of this situation and advising that, until corrected, you will pay the subs directly and reduce the payments to him. I also suggest getting copies of ay contracts with the subs and GC so you can meet both schedules.

There are separate legal and practical problems in this situation. If you have a notice of lien from the subcontractors, you must retain the liened amount from your payments or risk having to pay twice. If you have already paid (before and\y lien) or if there is no lien, your risk of having double liability is less. However, any time a prime is not paying its subs there is bound to be a problem down the line. Resolving those probems is fact-specific and a rote answer will not help you. It is dangerous to pay the subs directly without agreement from the prime because the prime may later claim that the subs were not entitled to the full payment and you will have to pay the difference. On the other hand, if the subs receive nothing, they will lien the property or walk off the job. You should therefore consult a lawyer whow is experienced with construction matters to assist you in keeping things under control. You may also find that your lender can provide some advice and assistance but be cautious that you don't trigger any issues with your loan agreement.

See also: http://info.corbettlaw.net/lawguru.htm