I am the project owner or a commercial renovation. We require lien waivers from our General Contractor and each of their subcontractors at the end of every project. During this particular project, our GC fired a subcontractor. They were paid through their termination date, and I have a conditional waiver for that payment. However, the subcontractor is telling me that he is still owed the full contract amount. The GC said they will not pay because the contractor didn't complete the work, and they incurred cost finding another subcontractor. Does this subcontractor have lien rights for the upaid amount, even though they did not complete the work?
The subcontractor should not be able to lien for work not actually performed. Whether they go ahead and do it is another matter - in which case you'll have to work to get the lien removed.
I wish i could give you a simple "yes" or "no", but the truth is it depends. If the money on the conditional waiver was paid then the sub may be cut off. I would get a copy of the cancelled check from the contractor. if the sub files a lien, you are going to want to issue a section 38 demand for the back up. That will allow you to assess the subcontractor's claim. If the subcontractor is liening for contract balance after termination adn teh work was not done, the subcontractor may have issues with an exaggerated lien. Exaggerated liens required careful handling, so I recommend you consult with experience construction counsel. Generally, if I cannot get the lienor to drop an exaggerated lien, I demand the lienor foreclose and I counterclaim for exaggeration or willful exaggeration. I would also implead the contractor under a breach theory and let the contractor do the heaving lifting. Best of luck!
A mechanic's lien can only be asserted for the value of the work performed. So, upon a termiantion, only the value of the work actually performed (including retainage on work actually performed) can be asserted in the lien. There are no lien rights for unperformed work.