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What can I do if my brother owes me for construction work?

What can I do if my brother owes me for construction work?

Q: Can a subcontractor be sued?

Yes, a subcontractor can be sued for breach of contract or negligence if they fail to meet their contractual obligations or cause damages. However, the ability to sue may depend on the terms of the contract and the relationship between the parties involved. It's important to document all agreements and communications.

Q: Can an independent contractor manage company employees?

Yes, an independent contractor can manage company employees if their contract allows for it. However, the relationship must be clearly defined to avoid misclassification as an employer. The contractor should not have the same level of control over the employees as a traditional employer to maintain their independent status.

Full question:

My brother was the contractor on the job, and I was a sub doing supervision and finish carpentry work. I do not have a signed contract with him, just a verbal. We used my credit to get materials for this job. I paid for all materials and some sub contractors to keep this job moving and to secure payment of a finished project. My brother has not paid me for all of the materials and subs that I paid out of my pocket and my own hands on work. He has entered into a payment plan with the owners, of $500/month with a balloon payment at the end of around $13,000. He is receiving monthly payments that are supposed to be passed on to me. He has only paid me three of out of eight payments. What assurances can I give to the home owner that if he pays me he will not suffer from anything my brother tries to pull such as a lawsuit. I have the paid in full, signed lien waivers, in my possession. On top of that he has filed for personal bankruptcy, and continues to collect from these people. What am I to do?

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

Answer:

The situation involves several legal considerations. First, a bankruptcy filing typically creates an automatic stay, preventing creditors from suing the debtor. However, if your brother's business is a separate legal entity, you may still have grounds to file a breach of contract suit against it. Creditors must be listed in the bankruptcy schedules, and you can present your claims to the bankruptcy trustee.

The homeowner is not obligated to pay you if the prime contractor (your brother) fails to pay subcontractors. If the homeowner has not received a lien waiver or proof of payment to subcontractors, they may withhold payments to the prime contractor until they receive confirmation of payments made to you and other subcontractors.

According to Wisconsin law, subcontractors must serve a written notice to the property owner within sixty days of providing materials or services to preserve their lien rights (Wis. Stat. § 779.02). If the prime contractor fails to give this notice, they may lose their lien rights unless they pay all obligations to subcontractors. Additionally, any funds paid to the prime contractor for construction are considered a trust fund for paying subcontractors and suppliers until all claims are settled (Wis. Stat. § 779.03).

If you have lien waivers and evidence of your payments, you may have a strong position to negotiate with the homeowner. Consider consulting with a legal professional to explore your options further.

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

Can an independent contractor supervise employees?

Yes, an independent contractor can supervise employees, but this arrangement depends on the terms of the contract and the nature of the work. If the contractor is hired to manage a project, they may oversee employees to ensure the work is completed as specified. However, the contractor must not have the same level of control over the employees as an employer would, or they risk being classified as an employer themselves.

Can a contractor supervise an employee?

Yes, a contractor can supervise employees, especially if they are hired to manage a specific project. However, the contractor's authority should be clearly defined in the contract. It's important that the contractor does not exert control over the employees in a way that would classify them as an employer, which could lead to legal complications.

What not to do with an independent contractor?

Avoid treating independent contractors like employees. Do not dictate their work hours, methods, or how they should complete tasks. Also, refrain from providing benefits typically given to employees, such as health insurance or retirement plans. Misclassifying an independent contractor can lead to legal issues, including tax liabilities.

Can a subcontractor be sued?

Who is accountable for the work of a subcontractor?

The primary contractor is generally accountable for the work of their subcontractors. If the subcontractor fails to perform adequately, the primary contractor may be held responsible for any resulting issues. However, subcontractors also have a duty to fulfill their contractual obligations and can be held liable for their own work.