ConstructionLawMonitor.Com: Pay When Paid Clauses and Lien Rights
On September 18, 2009| Email This |  Comment (1) |
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Our good friends over at Wolfe Law Group (ok, it was me) have put up an article on the trials and tribulations facing subcontractors due to the use of the dreaded “Pay When Paid” clause.
See their article here and how these clauses work. As a contractor you need to be aware of your right to payment and potential roadblocks on the way to getting paid.
One of the most important defenses to the “Pay When Paid” clause is your right to lien a project, and consequently the owner. Since the owner’s failure to pay the general contractor has caused your inability to recover payment, a lien will allow you to proceed against that party in a legal action for payment.
Read the article to better understand your rights and the tools you can use to ensure payment. Remember that owners and surety bonds can reached with a properly filed lien.
Contact Zlien.Com in order to protect your right to payment.
Those clauses can really hurt the subs … the interesting wrinkle here in Virginia is that there is a significant 4th Circuit case stating that sureties cannot rely on the clauses unless they are expressly incorporated into the terms of the bonds. Not sure what your state’s law is like on this point, but that can be an escape clause.