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Subcontractors may resort to litigation for unpaid fees

The construction process of any building project in Texas is based on agreements between the property owner and the contractors -- typically a general contractor with subcontractors to do electrical and other work. Disagreements are inherent in the construction industry, and it is common for disputes to lead to litigation. Very often a subcontractor is caught in the middle of a disagreement between the owner and the general contractor.

A subcontractor is a business entity just as dependent on payment for services rendered as the general contractor is, and if the property owner withholds payment to the general contractor, it does not mean the subcontractor must go unpaid. Fortunately, remedies are available. If it is a private project, the subcontractor may file an action for foreclosure of the property by first recording a mechanic's lien. Recovery against surety by pursuing payment bonds is another option. However, the subcontractor is free to demand arbitration or file a lawsuit against the entity that withheld payment.

It gets more complicated when the problem involves a public works project. Government claims may come into play before the public entity may be sued. Calling a notice to withhold or a stop notice may be a suitable remedy. This will require the public property owner to withhold compensation to the general contractor. The subcontractor can then file a request for the direct release of funds, rather than through the general contractor.

Construction litigation is a complicated field of the law, and an experienced Texas business law attorney may be the best person to navigate such a lawsuit. After assessing the claims and the relative information, a seasoned attorney can explain the available remedies to allow the subcontractor to make informed decisions about the way to proceed. A skilled attorney can advocate for the subcontractor throughout the legal proceedings.

Source: ecmweb.com, "Confronting Construction Conflicts", Marilyn Klinger, Accessed on Feb. 10, 2017

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