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Do owners of properties have an obligation to the subcontractors they didn't hire?

Yes, a homeowner can owe obligations to a subcontractor with whom you don't have a contract in certain circumstances. 

A lot of home owners do not know, but they are required under the provisions of the Construction Lien Act to retain 10% of the amount of the total contract or each payment made until 45 days after the work is completed.  This is a statutory requirement and failure to hold back the funds exposes the owner to obligations to the subcontrator who worked on their home - even where the owner and subcontractor do not have a direct contract.

That means, if you have paid your contractor in full, but your contractor has failed to pay its subcontractor, as the home owner you are exposed to a claim by the subcontractor up to the limit of the holdback.

In order to avoid any subsequent problems, every owner embarking on construction work at their poperty should retain 10% of all payments made to the contractor.  The holdback funds should be retained for 45 days after the work is declared complete.

If you have any concerns regarding your holdback obligations and rights under the Construction Lien Act you should contact a lawyer.

Renata Kis
Renata Kis
P: 905.667.6405