Legal Question in Real Estate Law in Maryland
Mechanics Lien
We are landowners who have been acting as the General contractor - we filed for the building permit and are listed as the general contractor on the permit. One of our contractors has not paid his subcontractors. We have not paid this contractor his final draw as he has not completed the work and we know that he has not paid all of his subcontractors. I have read the following:
''The only time a Maryland property owner has a defense of payment is an individual building his own residence on his own land. Such a homeowner is protected if the homeowner pays all contractors with whom the owner had a direct contract. A homeowner has a defense of payment if the subcontractor failed to provide a Notice of Intent to Lien before the owner made full payment to the contractor.''
We know that his outstanding debt to subcontractors is greater than what we are holding. Should we pay the contractor and use the above defense in court or continue to withold funds? I am afraid that if we pay - we will still have to pay the subcontractors. Please help!
1 Answer from Attorneys
Re: Mechanics Lien
While payment to the contractor prior to being put on notice of a lien is a good defense, you should never pay the general contractor in full without receiving a release of all liens from the subs and suppliers. You don't want to have to deal with a claim by the subs even if you may eventually prevail.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
