What can happen if a contractor fails to pay their sub-contractors?

When a contractor fails to pay their subcontractors, one of the primary legal recourses available to the subcontractors is to file a lien against the property where the work was performed. This process is known as filing a mechanic's lien. A mechanic's lien allows subcontractors and suppliers to claim a legal right to the property for unpaid work or materials provided.

This option is crucial because it serves as a form of security for the subcontractors and can compel payment. If the contractor does not pay, the subcontractors can enforce the lien, which may lead to the sale of the property to satisfy the debt owed. This legal mechanism is designed to protect the interests of those who contribute labor and materials to a construction project, ensuring they receive compensation for their efforts.

Other options may reflect potential actions subcontractors could take, but they do not directly address the immediate legal effect of unpaid bills in the context of real estate. Consequently, the most effective and direct action that can be taken in response to non-payment is the filing of a lien.