How can I protect my house from contractor liens?

Q: What are the exclusions in a GL policy?

General liability (GL) policies typically exclude coverage for intentional acts, contractual liabilities, professional errors, and damages from certain types of work, such as construction defects. Each policy can vary, so it’s crucial to review the specific exclusions listed in your policy to understand what is not covered.

Q: Does general contractor insurance cover subcontractors?

General contractor insurance does not automatically cover subcontractors. Each subcontractor should have their own insurance to protect against risks associated with their work. It's important for contractors to verify that subcontractors have adequate coverage to avoid potential liability issues.

Full question:

I signed a contract with general contractor to do repairs on my house for the amount that the insurance company pays. I'm dealing with all different subcontractors. I'm told that I'll get a detailed written invoice at the end of construction. How do I know that if they dont pay their contractors that they won't put a lien on my house. I dont have a contract that protects me and dont know what I need.

Category: Contractors
Subcategory: Construction Liens
Date: 04/07/2025
State: Texas

Answer:

In Texas, anyone providing labor or materials for construction can be required to give an affidavit confirming they have paid their subcontractors and suppliers in full. If they have not paid everyone, the affidavit must list the amounts owed and the names and contact information of those owed money.

To protect yourself from liens, you can file an affidavit of completion with the county clerk where your property is located. This affidavit should include:

Your name and address
The name and address of the original contractor
A description of the property
A description of the improvements made
A statement confirming the improvements are complete and the completion date
A notice that a claimant must file a lien affidavit within thirty days after completion to claim any retained funds

It's advisable to have a written contract outlining the terms to prevent future disputes. Additionally, you can request lien waivers as a condition of payment, which can protect against mechanics' liens being filed on your property.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Who pays for mistakes in a cost plus contract?

In a cost plus contract, the homeowner typically pays for the actual costs of materials and labor, plus an agreed-upon fee for the contractor's overhead and profit. If mistakes occur, the contractor may be responsible for correcting them at their own expense, depending on the contract terms. It's essential to have clear terms in the contract regarding responsibilities for errors to avoid disputes.

Does contractor insurance cover subcontractors?

Contractor insurance generally covers the contractor and their employees. However, it may not automatically cover subcontractors unless specifically stated in the policy. Subcontractors should carry their own insurance to ensure they are protected while working on a project. Always check the insurance policy details for coverage specifics.

What are the exclusions in a GL policy?

What voids a contractor contract?

A contractor contract can be voided for several reasons, including fraud, misrepresentation, lack of capacity, or if the contract is for an illegal purpose. Additionally, if either party fails to meet the terms of the contract, it may be considered voidable. Always consult a legal professional if you suspect a contract may be void.

Does general contractor insurance cover subcontractors?

What is the contractor and subcontractor payment act?

The Contractor and Subcontractor Payment Act is a law that ensures timely payments to contractors and subcontractors for work performed. It establishes procedures for making payments, including the requirement for written notices of payment and the right to file a lien if payments are not made. Specific provisions can vary by state, so it's important to consult local laws for details.