MIA Contractor - Unpaid Subs seeking $

Hey Everyone –

I’m hoping there might be some insight out there into an issue with closing out our recent reno job of our townhouse. Our contractor has ‘walked off’ the job and left some unfinished and poor work behind. We’ve held a little money back so while it’s a pain in the a**, I’m not too worried about using that $ to finish and also cover the costs of work and materials we’ve had to already take care of in his absence. We’ll be in a hole but not too bad and alas we’ll be done.

The bigger issue we’ve learned is the contractor did not pay the electric and plumbing subs who have now come to us and said they are owed close to $25K and will not sign off or certify the work until they are paid. They can not get in touch with the contractor either and we’ve learned (from our architects who also owed money by him) that the underlying issue is he is deep into gambling debts and has cut off all communication with them, subs, us and other clients.

So the chance of him returning and making things right is pretty much nil.

Has anyone had experience with needing sign of fs in this respect? What happens if we do nothing? I assume there are red flags on the property with the city that will become problems later, but also wonder if the subs can put a lien on the house even though we have no contract directly with them?

Any experience with bringing on another electrician/plumber to sign off for less money?

We can sue of course, but assume there’s no money/assets and don’t see how that really solves the issue any time soon.

I feel bad for the subs, but in paying them out we’ll have paid for the work 2x. I also have no way to know they arent just opportunists taking advantage of the situation.

Thank you for any insight!

randymcnally

in General Discussion 6 years and 4 months ago

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Master Plvmber | 6 years and 4 months ago

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@lurker,
You’re 100% right on all counts except that the whole process of contracting is a bit of a crapshoot for both sides. The truth is that a lot of what is done between both parties has to happen on good faith which is inherently a recipe for disaster. A GC doesn’t know if (s)he’s signing on with a nut job client or a deadbeat and has little recourse when payments are late or stop coming entirely. I work for a handful of excellent high end contractors. But, not many. Because, by nature, GCs seek to hire the cheapest subs which allows them to keep the most money for themselves. This could be a long conversation but the fact is that contracting is just as nerve-racking for a contractor (GC/plumber/electrician/etc) as it is for a homeowner. People turn me down or reject my bids to do their work at times. It’s part of the business. But people get INSANE when it’s me declining to do their work, and they won’t have it that a contractor or tradesmen is under no obligation to work for anyone they don’t want to. I sometimes get tempted to write a post listing the warni ng signs potential clients put out there when first speaking to a contractor like myself but that would probably not be a good business decision… Oftentimes, people don’t realize what they’re saying or how it’s being interpreted.

You brought up gas work.
Gas work in NYC has become a nearly insurmountable problem.
As we all know, unlicensed plumbing work in the city has led to multiple deaths by gas explosions and countless insurance claims for things like flood damages. The DoB allowed this *self inspection* nonsense in the city for too long and it’s opened the door for every unqualified and unscrupulous dirtbag with a bag of tools to work in people’s homes. None of the renovations I’m on allows self inspections (or self certifications) and the City no longer allows them for gas work at all.

HouseNut | 6 years and 4 months ago

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Even happens with general contractors recommended by master plumbers.

Lurker | 6 years and 4 months ago

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Hey Master Plumber–you are completely right yet I would emphasize that the deck is completely stacked against homeowners, and it is effectively impossible for a non professional person to navigate this process in a way that you would with any other industry. There is no manual for doing this process. As we’ve seen on this site, expediters and engineers are often found to be corrupt or criminally fallible. Read any thread with a code question and 4 architects will argue over an interpretation (and the notion that code can be interpreted is hilarious). And as you know, your own trade is rife with master plumbers who willingly cover for non-licensed workers to pad their pockets. DOB inspectors are like Soviet border guards. Our plumber, an established family business with a sterling reputation, explained that the current norm for gas work inspections is that inspectors find any reason to fail you 3 times so that a supervisor takes over to pass you and thus gets the blame if something goes wrong. It’s not homeowners who are cuting corners and corrupt and ultimately resp onsible for this process, it’s the licensing authorities and also the trades who need to be cleaned up.

I know a half dozen smart, sophisticated, professional people who all thought they were doing a renovation by the book, and all of them got hosed one way or another. Our contractor answered every call and text, signed an insanely detailed DCA contract, and then out of the gate hired subs who were being covered. Our contract specified he had to use licensed trades, he didn’t, and we only discovered it by accident. This is normal.

mattieweiser1

in General Discussion 6 years and 4 months ago

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@bklynreno thank you for your reply. I agree, the stress is not worth it. I am sorry you had the same issues. It is really incredible how unprofessional / remorseless these people are.

Guest User | 6 years and 4 months ago

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@rach_brklyn Two weeks after the contractor disappear. There was very little progress for 3-6months or work was done incorrectly. I should have moved on after 1-3 month but I thought things would change and I was afraid I could not find someone to finish. If I moved on earlier I would have saved my self a lot of money, time and stress.

Master Plvmber | 6 years and 4 months ago

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I’m on jobs like this all the time in Brooklyn over the last decade or so. It’s surprising how little is learned from these stories considering the frequency at which they now surface. There’s an industry out there, for some reason it’s especially prevalent in Brooklyn, that preys on homeowners seeking renovations and other repair work. They are ALWAYS the low bidders or close to it. The cost of legally performing contracting work in NYC is astronomical and so I get why they are hired, but the abandoned jobs I’m asked to complete or re-work to function adequately is getting higher and higher every year and it’s always at great expense to the homeowner on top of what money they’ve already lost by giving to their “contractor” who either disappeared or failed to perform in some other way.
Stop hiring these companies who have no verifiable history of performing work in the area.
Stop hiring people with whom you can not easily communicate via telephone/text/email.
Stop hiring people and companies that work under some other person’s license (this is a big one). I’m an exp ert witness in court right now (two actually) with a “plumber” who, when the judge asked if he was licensed, had every answer under the sun aside from the only acceptable “yes” or “no”. The answer is no. The unlicensed plumbing contractor made an illegal connection to a bathtub that flooded the apartment below.
It’s all the time lately.
People take deposits and progress payments and disappear into the wind forever.

Guest User | 6 years and 4 months ago

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I find it extremely unfair that an owner did nothing wrong and yet the easy solution for the subs is to put a lien on the property. It’s too easy, always the recourse by subs but not warranted most of the time.
There should be a way for unpaid subs to issue a claim against the GC, not the owner. That GC would then be barred from taking any new job until that situation would be resolved.

mattieweiser1

in General Discussion 6 years and 4 months ago

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@bklynreno @randymcnally I am sorry about your situation. Just curious – how long did the contractor disappear before you decided it was time to move on?

Guest User | 6 years and 4 months ago

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Sorry to hear about your situation. We had a similar one. We sent a letter to officially fire the contractor since he disappeared. In our case I think plumbers signed off or it passed self-certification. I believed the plumbers were fully paid. Electrical work was not signed off and not fully paid. Both plumber and electrician did not contact us. We ended up hiring a new contractor, electrician and plumber. Found out when the walls where open a lot of the electrical and plumbing work was not done.

resident2 | 6 years and 4 months ago

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The important thing here is that you do need the electrical & plumbing to be signed off. It is very costly to get new licensed professionals to sign off another’s work that they cannot see behind walls etc.
Yes, get all your proofs of payment to the GC, but you need to sit down and work out a compromise to get your plumbing & electrical finished & signed off.
Contact the licensing authorities: Department of Consumer Affairs, file a complaint. DOB if they are a GC.
But the bottom line is even if you think you are not going to be selling or refinancing any time soon, so what does it matter if open permits are on file, maybe violations start being filed etc. you need to close out the jobs you have already filed now.
It will be much harder fixing them later and the way this City is going who knows if they will start moving to collect fines on unfinished jobs etc.?
Definitely consult a specialized Construction litigation Attorney. Your house is worth too much to screw this up or just recoil in anger & frustration.

jcarch | 6 years and 4 months ago

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I agree with slopefarm regarding sitting down with subs to have a chat. Show them records of your payments so that they can see that it’s not you who’s stealing from them, it’s the GC. They can still file a lien, but the discussions may go better if they’re not wondering whether or not you actually paid GC. The discussion is basically “you can take $x at some point in the future, after you file a lien, have legal expenses, etc.” “Or you can take .5x now (just as an example) with no legal fees.” If they take $ from you, they must sign a lien waiver, so they can’t take your $ today, and then file a lien for the remaining balance tomorrow – your attorney should draw this up.

HouseNut, sorry this doesn’t help you, but for others out there, ALWAYS get lien waivers during the project, and not just one waiver at the end of the project. At a minimum, get them at the 25%, 50%, 75%, and 100% completion points form the GC and all subs. This is the mechanism that will expose the GC if he’s taking your $ but not paying his subs. For our projects, we won’t approve the final payment until the final lien waivers are in place to protect our clients.

slopefarm | 6 years and 4 months ago

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Just to add to the good comments above, you could consider at least a “what would it take” discussion to perhaps settle on paying part of what the subs are owed in return for completing the sign-off work, not filing a lien etc. this might be attractive if they are short on cash. But consult with an attorney first and understand your rights and risks here.

Lurker | 6 years and 4 months ago

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FWIW, my understanding is that there limits on the amount of time between when the last work was done and when they a sub can file a lien, something like 6 months. And they have to renew it periodically once it’s established. That said if they did real work and were legit, I’m not into subs not getting paid so if they deserve it you might just pay up and pursue the GC on your own.

Guest User | 6 years and 4 months ago

string(1) "3"
string(6) "195579"

the subs can and very well may put a lien on the property for the amount owed to them. the lien is attached to the property itself so it doesn’t matter that you had no direct contract with them. this is a very unpleasant and thorny situation and you would be wise to consult with a construction lawyer to discuss what your legal and practical options are.

Guest User | 6 years and 4 months ago

string(1) "3"
string(6) "195579"

the subs can and very well may put a lien on the property for the amount owed to them. the lien is attached to the property itself so it doesn’t matter that you had no direct contract with them. this is a very unpleasant and thorny situation and you would be wise to consult with a construction lawyer to discuss what your legal and practical options are.