What happens when an unpaid subcontractor files a mechanics lien?
Short answer. 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.
- COMAR 09.08.01.12
Work it through
You're the contractor. Pick what you'd do, then see how each choice plays out.
Sarah Mitchell
First-time homeowner who wants a kitchen renovation
Tony files a mechanics lien on Sarah's property. Sarah is furious — she didn't even know who Tony was, and now there's a lien on her house.
"I paid YOU! How is this my problem?" she shouts over the phone.
She files a complaint with the MHIC.
- Expensive lesson
The lien is released, but the MHIC complaint still exists. You violated COMAR 09.08.01.12. Sarah may also have grounds for a Guaranty Fund claim. This single mistake cost you: Tony's payment, legal fees, the complaint investigation, and your reputation. All because you tried to make your cash flow problem someone else's.
- Worst path
Fighting this in court costs more than paying Tony. The law is clear: you must pay your subs (COMAR 09.08.01.12). Sarah's complaint to MHIC is legitimate. You now face legal fees, the original debt, potential Guaranty Fund liability, MHIC disciplinary action, and two destroyed professional relationships. This is how contractors lose their license.
All 14 subcontractors, liens & workers questions
- Must you pay subcontractors when the homeowner pays late?
- What happens when an unpaid subcontractor files a mechanics lien?
- Can a subcontractor put a lien on a house the owner paid in full?
- Should a homeowner pay your subcontractor directly?
- What if your electrician's license expired mid-job?
- Can you hire a plumber who is still getting licensed?
- Can a homeowner do their own electrical work on your job?
- Who coordinates subcontractors working in the same space?
- Who is liable when a subcontractor damages the home?
- How do you handle a subcontractor who stops showing up?
- Are your regular workers employees or 1099 contractors?
- What must you do when an employee is hurt on the job?
- What happens when an off-the-books worker is injured?
- What are the risks of hiring day laborers for cash?