14 practice questions

Subcontractors, Liens & Workers

As the prime contractor you answer for everyone on the job. These scenarios cover paying subcontractors on time, mechanics liens, using only licensed trades, classifying workers correctly, and what happens when someone gets hurt.

1. 01Must you pay subcontractors when the homeowner pays late?Yes. Under COMAR 09.08.01.12 the prime contractor must pay subcontractors and workers regardless of when the homeowner pays, and a pay-when-paid clause does not override that duty.
2. 02What happens when an unpaid subcontractor files a mechanics lien?The lien clouds the homeowner's property, and paying it off does not end the matter: you still face an MHIC complaint for violating COMAR 09.08.01.12, legal fees, and a possible Guaranty Fund claim.
3. 03Can a subcontractor put a lien on a house the owner paid in full?Yes. Maryland mechanics lien law lets unpaid subcontractors and suppliers lien the property even if the homeowner paid the contractor in full. Collect lien waivers as you pay subs and give the homeowner copies.
4. 04Should a homeowner pay your subcontractor directly?No. Your contract covers all the work, and under COMAR 09.08.01.08 you remain responsible for it as prime contractor. Direct payment costs you control of the sub and blurs warranty responsibility while you keep all the liability.
5. 05What if your electrician's license expired mid-job?Everything done after the expiration date is unlicensed work. Stop, and have a licensed electrician inspect all of it before proceeding; your MHIC license does not cover electrical work.

6. 06Can you hire a plumber who is still getting licensed?No. Plumbing in Maryland requires a master plumber's license, and "in the process" means unlicensed. Using an unlicensed trade sub is your violation, and the plumbing inspection will fail without a license number.
7. 07Can a homeowner do their own electrical work on your job?Not safely. Electrical work requires a licensed master electrician or a journeyman under one, and unlicensed work under your contract and permit puts your inspection, your liability, and the homeowner's insurance coverage at risk.
8. 08Who coordinates subcontractors working in the same space?You do, as prime contractor. A typical rough-in sequence is plumbing first, because of pipe pitch, then HVAC ducts, then electrical, which routes most flexibly. Set the schedule before anyone arrives.
9. 09Who is liable when a subcontractor damages the home?You are. Under COMAR 09.08.01.08 the prime contractor is responsible for all work on the contract, including subcontractors'. File the claim on your liability insurance, manage the repair, and seek contribution from the sub's insurer.
10. 10How do you handle a subcontractor who stops showing up?Replace them. Days of silence on an open job is abandonment, and you still owe the homeowner the contracted completion date. Managing your subcontractors is your responsibility, family or not.
11. 11Are your regular workers employees or 1099 contractors?Employees, if you control when, where, and how they work, provide the tools, and set their schedule. Maryland follows IRS guidelines, and misclassification brings back taxes, penalties, and workers' compensation liability.
12. 12What must you do when an employee is hurt on the job?Report the injury promptly to your workers' compensation carrier and the Maryland Workers' Compensation Commission. The employee is entitled to medical benefits and wage replacement while recovering.
13. 13What happens when an off-the-books worker is injured?You are personally liable for all medical costs and lost wages, face state penalties for operating without workers' compensation insurance, risk your MHIC license, and could face criminal charges for a serious injury.
14. 14What are the risks of hiring day laborers for cash?No workers' compensation coverage, no employment verification, no tax withholding, and safety gaps. If one is injured, you are personally liable for the costs, and you risk federal penalties and your MHIC license.