Sierra Madre, CA asked in Consumer Law, Contracts, Real Estate Law and Construction Law for California

Q: Is general contractor in breach of contract? What should I do- he's insisting on payment bu appears to have abandoned me

12 HI contracts with 1 GC 10 paid in full due to how progress payments worded Only 3 HIC completed 65% work don 85% of total balance paid Arranging financing for 1/2 of 15% left but now have preliminary lien notice from subcontractor & want to hold back 10% of total balance until resolved & all work completed satisfactorily No hold back for any reason in contracts but over months said several times I want it. GC pressuring me aggressively to pay 1/2 of last 15% or won't schedule work. Tense 2 hours of insults from GC & discussion yesterday. Gave me 24 hrs to determine % mix of finance and check. Learned today 2nd sub c hasn't been paid by GC. Asked for lien waivers and release from all parties yesterday. GC insisting today I pay 40% of balance left even though cannot tell me what for. Feel threatened. GC lef today saying I'll see you in court as I wanted to talk through my screen door. What to do now? Continue to try to work with GC since I've paid so much already? Can I holdback $

1 Lawyer Answer
James Alan Greer
James Alan Greer
  • Construction Law Lawyer
  • Boulder, CO
  • Licensed in California

A: Dear Owner Requesting Advice on Retention Payment issue: While I am adept at advising owners in a construction setting, your question as stated is probably not capable of reply in this limited forum until more information is obtained. Critically, an attorney would definitely need to review the underlying construction contract or contracts (are there 12 contracts for these 12 projects ? all with the same General Contractor ?). Do the contracts mention retention ? If not, is there mention of withhold for failure of G.C. to supply lien releases ? Also, as far as the progress of the project that seems to be the subject of the payment dispute - I'd need to know what is the percentage completion of the project which the G.C. is asking for 95% payment ? One thing you want to AVOID is the prospect of a Mechanic's Lien because (A) that will interrupt your financing (lenders will refuse to lend on a project that is subject to foreclosure of a mechanic's lien), and (B) your attorneys fees will escalate if you have to defend District Court litigation (ie. after the G.C. files for foreclosure on the lien). It would be ADVISED to head off liens and litigation, and instead hire counsel to get to the "resolution table" as soon as possible. That strategy has served my clients better and more efficiently than litigation. JIM GREER is an attorney licensed to practice in CO and CA and has specialized in real estate matters for the past 30 years; nothing herein shall be construed as the offering of legal advice insofar as Mr. Greer is not in an attorney-client capacity with the inquiring party. 303.818.8422

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