Nevertheless, if the contractor fails to pay the subcontractor, the latter can not only sue the contractor, but by following certain procedures he too can have a lien on the real estate and can have it sold at auction. If the owner has paid the contractor and the contractor is over his head in debt, the subcontractor very likely will seek to recover through the mechanics lien laws, and although the owner owes nothing, payment to the subcontractor may come from the owner's property. The justification for this law is that if someone must suffer from the contractor's default it should be the owner, who is supposedly better able to choose and supervise a reliable contractor. If a subcontractor obtains a lien due to a contractor's default, after the owner has paid the contractor, the owner may have to pay twice to save the real estate from auction. The mechanics lien laws have certain strict requirements, which vary widely from state to state.
Deadlines are crucial and delay can be fatal.
Some steps may have to be taken even before the construction work is begun. The above information is not intended to replace representation by an attorney or give you specific legal advice.