When you commit to complex home renovation projects such as a kitchen renovation, bathroom renovation or a complete renovation of the basement, a general contractor will often rely on the services of subcontractors such as an electrician, plumber, specialist in soil, painter. Although you have entered into a contractual relationship with the general contractor, you are also indirectly in a contractual relationship with the subcontractors engaged by the general contractor.
Legal hypothec
A legal hypotec is a legal action that guarantees the claims of the stakeholders (general contractor, subcontractor, supplier) who participated in the construction of a project. If a participant has not been paid, she can request that a legal hypothec be imposed on your property.
Mitigate the risk of a legal hypothec
In order to avoid any risk that a subcontractor or supplier has not been paid, it is important that you ask after each payment a waiver which is simply a signed notes from subcontractors confirming they received the amount that’s due to them. We strongly advise you not to issue any additional payment until you have received a waiver from subcontractors for the previous payment completed.
Billdr’s tips
- Before the project, inform the general contractor that following each payment you’d like to receive proof that all subcontractors have been paid.
- You can also ask to have the contacts of all subcontractors involved on your project.
