I am finishing a home addition project with a general contractor in North Carolina. The GC has been a little lose with his sub contractors and I am not 100% sure he has paid them all. In fact he has switched a few times on Subís for such things as electrical work. At the end of the project he wants to give me a release of work from him as the GC to avoid future lien actions. Although I know I need this from him, do I not also need individual ones from the Subís? He insists his release covers any potential actions by subs in the event of a dispute, but does this really protect me or am I still subject to a Subís Lien if they were not paid and chose to file against my property?
1 Answer from Attorneys
While it may be good practice to have a release from Subs - technically you don't need one if no Sub has filed a lien at the time you pay your GC.
In other words, a sub has a lien on your property under the following circumstances:
If you owe the GC money and the GC owes the Sub money and the Sub files a lien and notice of claim of lien on funds. So if the Sub files a lien prior to you paying the GC in full, you must not pay the GC until everything is straightened out.
If no liens are filed and you pay GC in full and then Sub files a lien, you wouldn't have any liability although you may need an attorney to have the GC cancel the lien.