If a customer fires a subcontractor and subcontractor’s workis 90% completed, does the general contractor have to pay subcontractor?

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If a customer fires a subcontractor and subcontractor’s workis 90% completed, does the general contractor have to pay subcontractor?

We (subcontractors) were 90% done painting an interior for a homeowner that was moving to IA. Both homeowner and project manager had seen the work we had completed and both knew what we had left to complete. The project manager had even advanced us money after he and the homeowner had inspected the completed work (based on the work we had done and only having 10% left to finish. Homeowner fired us and said couldn’t discuss the reason. General contractor won’t pay.

Asked on August 19, 2011 Iowa

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If the subcontractor is terminated by the property owner where 90% of the subcontractor's work is completed, the general contractor is obligated to pay the subcontractor for the work actually done and not paid for and the net profit for the 10% balance of the job.

If the general contractor does not pay the subcontractor for this work and the 10% net profit, the subcontractor hopefully has pre-liened the project for a mechanics lien and if so, can perfect the lien since he or she is no longer wanted on the job site and file suit against the property owner to foreclose on the lien.

The subcontractor also can bring suit against the property owner for "common counts" which would be the reasonable value of the services rendered in addition to suing the general contractor under the subcontract's express terms.

Good question.


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