Whether building a home or commercial building from the ground up, or simply adding something to your existing property, owners will likely need to hire construction experts to handle the work. Beyond simple projects such as painting, adding backsplashes, changing out fixtures, or landscaping your outdoor spaces, owners will likely need to hire a general contractor and at least one subcontractor for large-scale, complex work, such as large-scale renovations, structural changes, changes to major systems such as electrical panels or plumbing lines, or any project that requires permits.
With so many people working on a project, it can be challenging to determine who is responsible for what, especially when disputes arise. Do you approach the subcontractors if you are not happy with their work? Who do you talk to about safety issues? Who ensures everyone gets paid? These and other questions can be answered by a civil litigation attorney with construction contracts experience at King Law Offices. Call (888) 748-5464 to schedule a consultation and learn more about handling disputes during your Tennessee, South Carolina, or North Carolina construction project.
What Is a General Contractor?
A general contractor (GC) is a professional hired to oversee and manage a construction project from start to finish. They act as the primary point of contact for the project owner. The GC coordinates all work on the construction site, including hiring and supervising subcontractors, procuring construction materials, and ensuring the project complies with all local and state building codes and regulations.
Specific duties a GC handles include:
- Project Management: A GC manages the day-to-day activities on the construction site and handles scheduling and coordination of all the trades and workers on the job site.
- Subcontractor Management: General contractors hire and manage various specialized subcontractors, review bids, negotiate contracts, and ensure the subcontracted work meets legal and client standards.
- Communications: The GC is the main point of communications between the project owner and the construction team (subcontractors). This reduces misunderstandings and conflicting instructions or requests.
- Resource Acquisition: The GC obtains all necessary equipment, materials, and labor for the project.
- Compliance: General contractors ensure the project adheres to all local laws, building codes, and regulations.
- Budgeting and Bidding: A GC provides accurate cost estimates to the project owner, manages the project budget, and is accountable for the project’s overall financial performance.
- Risk Management: A project’s GC is responsible for potential issues and oversights that may arise.
What Is a Subcontractor?
A subcontractor, sometimes referred to as a sub, is an individual or company hired by the general contractor to perform a specific part of a larger project, such as plumbing, electrical, framing, drywall, or concrete. Subcontractors are independent workers who provide specialized skills to a construction project, but manage their own workers, taxes, and other business responsibilities. They are paid by the GC, not the project owner, and generally do not interact with the project owner, other than polite passing interactions. They take orders from the GC, but they are independent entities or small businesses, not employees of the GC.
Specific characteristics of subcontractors include:
- Work Focus: Subcontractors focus on their own work, tools, and materials.
- Specialized Work: Subcontractors are hired for specialized skills or tasks that the GC lacks the capacity or expertise to handle.
- Contractual Relationship: Subcontractors must follow the written contract that outlines the specific scope of work, terms, and payment between the sub and the GC.
- Payment Structure: Subs are paid by the GC, not directly by the project owner. However, they do typically have recourse against the project owner if the GC does not pay them because the project owner does not pay the GC.
- Responsibilities: They are responsible for their own business expenses, including their taxes, workers’ compensation, and other insurance.
How Projects Proceed With a General Contractor and Subcontractors
There is a typical order that a construction project takes. Projects begin when the project owner hires a GC. Property owners usually take several bids from multiple general contractors and then choose one, often based on a combination of the price in the bid and reviews or recommendations from others. Then, the GC plans the project, obtains any required permits, and assembles their team of subs with contracts. Project owners do not usually have any say in who the subcontractors are unless they include a clause in the contract with the GC that says they can approve or veto subs.
Construction then begins, and the GC oversees the daily activities. The GC ensures the work progresses according to the planned schedule, avoiding unnecessary delays and informing everyone of unavoidable ones. This schedule includes ensuring that subcontractors are on-site on their scheduled days, and not scheduling subs in ways that will delay work, such as scheduling drywall before the electrical and plumbing are done or scheduling plumbing and heating, ventilation, and air conditioning (HVAC) crews at the same time (since both install mechanical systems in the same areas, potentially leading to conflict and potential rework). Once construction is complete, the GC closes out the project, managing the final stages and ensuring everything is completed to the project owner’s satisfaction and all legal requirements.
Who Has Responsibility and Liability?
In general, general contractors and subcontractors have the same responsibilities and liability in North Carolina, South Carolina, and Tennessee. However, there are some differences, which may seem small but can be significant. Property owners should ensure they understand these differences so they know how to handle disputes or what to expect in a dispute.
General Responsibility and Liability Standards
The GC manages the project, coordinates the subs, and ensures that work is completed as defined in the project owner’s contract. They are liable for failing to supply subcontractors or for delays. Regarding safety, GCs have limited liability for a sub’s Occupational Safety and Health Administration (OSHA) violations, but they do have a general duty to ensure the safety of everyone on the construction site. They can also be liable for negligently hiring or retaining subs.
Subcontractors are responsible for the quality and safety of the specific trade work that they do, and not deliberately destroying or damaging the work of other subs. Subs must also perform their work according to the contract they have with the GC, and are liable if their work is faulty, does not meet the specifications in the contract, or causes property damage or injury to another worker, the property owner, or anyone else legally on the site.
North Carolina Specific Standards
North Carolina differs from other states regarding liability for uninsured subcontractors whose workers are injured. Under the state’s Workers’ Compensation Act, N.C. Gen. Stat. § 97-19, general contractors can be held responsible for an uninsured subcontractor’s injured worker. This responsibility may mean the GC has to provide insurance coverage or charge the sub for such insurance.
N.C. Gen. Stat § 44A‑8 allows both general and subcontractors to file a mechanics’ lien against the property if the owner fails to promptly pay based on the contract terms or for completed work. To do so, they must file a claim of lien on the property within 120 days of their last contribution to be perfected. Then, they must file a lawsuit to enforce the lien within 180 days of their last contribution (within 60 days of filing the claim of lien) to maintain priority. Property owners must designate a lien agent for the property on which the work is being done, and this lien agent accepts the lien claim filings on behalf of the property owner.
South Carolina Specific Standards
S.C. Code § 29-6-30, known as the Prompt Payment Act, requires project owners to pay for work done per the contract’s terms and provisions within twenty-one days of the payment request, either by mailing or otherwise delivering payment. This act also requires contractors to pay their subcontractors, and those subcontractors to pay their subcontractors, within seven days of receiving payment. This does not prevent the project owner from withholding payment for unsatisfactory job progress, unremedied defective construction, disputed work, or other legitimate reasons.
S.C. Code §40-59-810, known as the Notice and Opportunity to Cure Construction Dwelling Defects, requires homeowners to provide a contractor with written notice of construction defects and allow the contractor an opportunity to fix them before they can file a lawsuit. The homeowner must provide this written notice by personal delivery or certified mail at least ninety days before initiating legal action. The contractor then has thirty days to take one of several actions, including inspecting the defect, offering to repair the defect, or denying the claim entirely. Homeowners who repair the defect before sending a notice or before the thirty days have passed may invalidate their claim by making it impossible for the contractor to exercise their right to inspect the property. If a homeowner has a construction defect that they believe requires immediate repair, they may want to consult with an attorney at King Law Offices to learn how to proceed without invalidating their construction litigation claim.
Tennessee Specific Standards
Tennessee also has a Prompt Pay Act, found in TN Code § 66-34-202 (2024). This requires the project owner to pay the prime contractor (the general contractor) within thirty days after a payment request is made in accordance with the contract’s terms.
Other notable dispute standards include that project owners will typically file a lawsuit for damages to property or a breach of contract against the general contractor. The GC can then pursue the responsible subcontractor and seek indemnification. Additionally, if third parties such as neighbors, suppliers, or other subcontractors are injured or suffer damages from a sub, the GC is liable and will need to defend against these claims and seek recovery from the sub.
Resolving Disputes That May Arise
Project owners can take several steps to resolve disputes that arise. Which step they choose will likely depend on the details of the dispute.
Review the Contract
Often, the first step a project owner should take is to review the contract they have with the GC, especially if they believe there has been a breach of contract. Depending on the type of dispute that has arisen, they may need to request access to the contracts between the GC and the subcontractors. Often, the contract’s terms and provisions can clarify responsibilities and liability and resolve the dispute quickly. While the project owner should consult with an attorney before signing the contract with the GC to ensure they understand the contract fully, they may also need to consult with an attorney upon receipt of the contracts between the GV and subcontractors to ensure they fully understand the terms and provisions of those contracts as well.
Find Out If There Is a Notice of Subcontract
In some instances, a dispute may arise when a subcontractor puts a mechanics’ or contractors’ lien against the property for lack of payment. This may cause a dispute because the project owner has paid the GC, but the general contractor did not pay the subs, because the project owner believes the work has not been completed properly, or for other reasons. However, some states require subcontractors to file a Notice of Subcontract before they can place a lien against the property. If they do not, they may not have the standing to file a lien. This notice also ensures that subs are notified each time the project owner makes a payment to the GC, which may also reduce the chances of a dispute over payments.
Communicate Directly
Direct communication is often the most appropriate method of resolving disputes related to construction. Project owners should communicate professionally, using a documented method such as certified mail or emails to an email address known to be associated with the GC. They should clearly explain the issue they have and ask for a meeting to begin the resolution of the issue. They should keep all documentation of attempts at communication, even if the GC fails to respond, as this provides the paper trail proving the project owner’s attempts to resolve the issue. When setting deadlines for response, project owners should be reasonable. If they are uncertain what would be reasonable or believe the issue requires immediate repair or resolution to prevent damage or injury, they should consult with an attorney to determine how to proceed.
Consult With Legal Counsel
Construction law can be complex. Project owners may feel confident attempting to resolve a dispute on their own, but it is still advised that they consult with an experienced attorney who is familiar with their state’s construction laws. If other attempts to resolve the dispute fail and the project owner is considering a lawsuit, they will likely wish to discuss their options with an attorney first to ensure they have exhausted all other options and learn more about the litigation process so they can make an informed decision.
How a Civil Litigation Lawyer May Assist You
Whether you are building a new home or adding on to an existing property, you likely started the project with a dream of how wonderful it would be when the project was complete. Unfortunately, construction does not always run smoothly. Problems can occur that damage or delay the project, and other disputes regarding payments, quality, or performance can arise. An experienced civil litigation attorney at King Law Offices may be able to assist you with understanding contracts and determining whether responsibility or liability rests with the general contractor or a subcontractor. Call (888) 748-5464 to book a conversation and learn more about your legal rights and options in North Carolina, South Carolina, or Tennessee construction disputes.
