Do I Have to Pay My Contractor’s Sub?
During the course of a construction project, you learn that a subcontractor has filed a mechanic’s lien on your property. Now what? Are you responsible for paying your contractor’s sub-contractor? As the property owner, you have several options available to you, including putting pressure on the general contractor to pay the claim, obtaining a lien bond, or withholding the amount of the claim from any future amounts due to the general. Before taking any definitive action, however, you should carefully scrutinize the lien to ensure that it can be enforced.
One requirement often overlooked by property owners is the subcontractor’s burden to prove that you still owe money to the general contractor. In Massachusetts, a subcontractor’s lien is capped at the amount “due or to become due” from the owner to the general contractor at the time the owner learns of the subcontractor’s lien. If the general contractor is not due any additional money, a subcontractor’s lien is worthless even if it was timely and properly filed and the subcontractor can prove that it has not been paid. How much, if any, is due to the general contractor at the time the owner learns of the lien is not determined exclusively by what the owner knows it owes or does not owe to the general. In other words, facts which exist at the time of the lien which, if known, would eliminate any additional money owed to the general can be used to invalidate the lien even if the owner was not aware of those facts at the time of the lien. The critical factor is what was objectively due or to become due to the general contractor at the time the owner learned of the lien.
Importantly, it is not the owner which must prove that no additional money was owed. It is the subcontractor’s responsibility to prove the amount of its lien by proving what amounts were “due or to become due” to the general. An owner who learns of a lien against its property by a subcontractor should immediately scrutinize the project accounting and all facts available to it to determine what amounts it may owe to the general contractor at that time. Having this information may lead to an additional, often-underutilized defense available to property owners confronted by liens placed by subcontractors.