Construction projects often require the cooperation of multiple parties who contribute their specialized skills to complete a large-scale job. If there is a general contractor at the helm, he or she typically hires sub-contractors including the following:
Sub-contractors expect to receive payment from the general contractor once the property owner pays the bill. If the general contractor does not pay the sub-contractors as expected, under construction laws the sub-contractors can file a mechanics lien against the property and make the property owner responsible for paying them. Since their work becomes an integral part of that property and its value, there is no way for them to repossess what they contributed without destroying the property.
Understanding construction lien laws
Construction liens, also known as mechanics liens, give sub-contractors the means to obtain payment for their work by attaching what they are owed to the property. But they must act quickly to file their liens by the specified deadline, which can range from 30 to 90 days following completion of the job.
Also, if the property owner files for bankruptcy, all creditors, including sub-contractors, must stop collection efforts. However, because of the lien, the sub-contractors that are owed money are considered secured creditors. This means they will be paid ahead of unsecured creditors.
If the property goes into foreclosure, all liens are then wiped out. At this point, the only option that remains for a sub-contractor is to sue the general contractor. At the Stewart Law Firm in Little Rock, we represent contractors and sub-contractors and can advise you of your legal options and rights under construction laws.
Contact us for help with construction liability law
At the Stewart Law Firm, construction attorney Chris Stewart also understands the fine points and complexities of construction liability law. Since construction worksites are very dangerous places, with tradesmen working side-by-side with dangerous equipment, accidents result from carelessness and negligence.
Despite all efforts to follow the Occupational Safety and Health Administration (OSHA) regulations, serious accidents can occur that scar workers with painful, long-term medical problems and life-altering disabilities. For this reason, worker disputes and injury claims seeking compensation for personal injuries are very common in the construction industry. Let the Stewart Law Firm help you with any construction liability lawsuits threatening to derail your business.