I have a GC working on a rehab for me. He will need to contract out the electrical, plumbing and HVAC. Before final payment should I demand a lien release from each of his subs?
Your general contractor should be required and willing to sign a statement saying all materials and labor perfomed by him and all subcontractors have been paid before final payment. And in my opinion, on a rehab, it is wise to ask your gc for a statement from all those subs who work on the job as the work is completed at each stage of the draws. It's an extra step, but it wil help protect you from an unscrupulous gc or even one of his subs that want more and could place a lien on the property. Anyone can place a lien, whether valid or not, and cause you problems. I think a workmans lien is superior, so it could hold up a closing, maybe even having to wait for a court judgement.
Sadly, it is smarter to keep business transactions in writing and under contract or sooner or later you will get taken. Even then you still have problems sometimes.
Your general contractor should be required and willing to sign a statement saying all materials and labor perfomed by him and all subcontractors have been paid before final payment. And in my opinion, on a rehab, it is wise to ask your gc for a statement from all those subs who work on the job as the work is completed at each stage of the draws. It's an extra step, but it wil help protect you from an unscrupulous gc or even one of his subs that want more and could place a lien on the property. Anyone can place a lien, whether valid or not, and cause you problems. I think a workmans lien is superior, so it could hold up a closing, maybe even having to wait for a court judgement.
Sadly, it is smarter to keep business transactions in writing and under contract or sooner or later you will get taken. Even then you still have problems sometimes.
Terry