Q: what are our options when a contractor does not pay a subcontractor for a job done for over two months?
A:
Under California law, a subcontractor who has not been paid for work performed has several options to seek payment from the contractor. Here are some of the main options:
1. Mechanic's Lien: A subcontractor can file a mechanic's lien against the property where the work was performed. This provides a security interest in the property and can help pressure the contractor to pay the outstanding debt.
2. Stop Payment Notice: A subcontractor can serve a stop payment notice on the property owner, lender, or other party holding funds for the project. This requires them to withhold sufficient funds to cover the subcontractor's claim.
3. Payment Bond Claim: If the project is a public works project or a private project with a payment bond, the subcontractor can make a claim against the bond for the unpaid amount.
4. Prompt Payment Penalties: California law requires contractors to pay their subcontractors within a certain timeframe (usually 7 days after receiving payment from the owner). If the contractor fails to do so, they may be liable for prompt payment penalties of 2% per month on the unpaid balance.
5. Legal Action: The subcontractor can file a lawsuit against the contractor for breach of contract, seeking payment of the outstanding debt plus interest, attorney's fees, and other damages as allowed by law and the contract.
6. Complaint with the Contractors State License Board (CSLB): The subcontractor can file a complaint with the CSLB, which may investigate the complaint and take disciplinary action against the contractor's license if warranted.
It's advisable for the subcontractor to consult with an attorney experienced in construction law to determine the best course of action based on the specific circumstances of their case.
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