Q: Can i withhold getting a final inspection on a project for a customer that has failed to pay on previous projects?
I am an electrical contractor in Columbus, Ohio. We have done work for a hotel here local. On project one (room renovation), the hotel is currently in litigation with the general contractor we were working under. We had nothing wrong with our scope of work, but because technically all payments go through the GC, they stopped paying. Needless to say, our last payment (62k) was involved in that and no one is willing to pay even though we were on time with no issues. Before we had hashed all that out, we started project two (adding rooms) with a different GC (general contractor). The second project they are withholding the final payment (30k)for what should be a warranty issue on an item they are having issues with, but they spec'd for the project. At the same time project 2 was going on, they hired us to do project 3 (electric for pool remodel). Everything has gone fine, but we are wanting to withhold the final inspection on that project to force them to pay the other debts.
A: To preserve your mechanics lien rights under Ohio law, you should be obtaining a Notice of Commencement from the project owner on each job and timely sending a Notice of Furnishing to be able to claim mechanic's lien rights. Then if you aren't paid, you should be filing a Mechanic's Lien affidavit within 75 days of your last day of work on the project, and then send a copy of that to the GC and project owner within 30 days. You can also send copies of the lien to any construction lenders. That usually gets some attention. If you withhold inspection on job #3, then they could sue you for breach of contract and any money damages caused by your inspection delay. Talk to a local construction law attorney.
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