Question: I am building a house in New York state. The General Contractor hired a company to lay the house foundation. The two of them worked together in the past, and due to whatever agreement they had, the construction started using the foundation company's license without my knowledge. The GC became flaky as construction progressed. The government inspectors gave a dozen tickets that the GC didn't properly address, and eventually the fines came to $50k by the time I found out. I went to court with GC together, and the fines were reduced to $20k. Then the GC just walked off the job, closed his company, and stopped taking my calls. Since the tickets were on the foundataion company's license and not paid by the GC, the foundation company's license got suspended. Obviously they are furious and want to put a lien on my property, and I won't be able to complete the house with outstanding fines with the city. What should I do?
Response 1: Unfortunately, your only option here is to pay the fine so that the foundation company's license can be reinstated. You can then go after the GC for reimbursement. However, if the GC has gone out of business, there would be no one to sue for reimbursement. You would have to write off the cost on your taxes.
What is my obligation to the foundation company?
Response 2: You have to pay the fine. Otherwise, the company would put a lien on your property.
Can they actually put a lien on my house?
Response 3: Yes, they can.
If I pay the fines myself, how can I sue the GC now that he has closed shop?
Response 4: Unfortunately, you cannot if the GC is no longer in business.
Thanks for the reply. Since I didn't know the foundation company had allowed the GC to use its license, why am I responsible for this unfortunate outcome?
Response 1: Because of one undeniable fact unfortunately: the work was done on your property. If you do not take care of the fine, the subcontractor would most likely put a lien on your property. It is quite unfair since you were not aware of the GC's actions until after the fact. Nonetheless, the lien would be legal.
Would it be more reasonable for the foundation company to pay the fines and try to recover the cost from the GC instead of me?
Response 2: It would be. However, the foundation company has more leverage against you than the GC who is no longer in business and thus would insist and expect for you to pay for the fine or otherwise a lien would be put on your property.
If I am responsible, then does it mean the GC can go nuts and create all kinds of havoc without my knowledge then walk away, and I am just fully exposed?
Response 3: Unfortunately, this is a risk a property owner takes when a GC hires subcontractors for the job. Eventhough you may not have a direct relationship with the subs, the GC's action with the subs would impact you, unfortunately, and it is usually not in a good way.
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