ATTENTION ALL SUB-CONTRACTORS DOING RESIDENTIAL RE-MODELING WORK

The Court of Special Appeals of Maryland on November 13, 2000 filed its opinion in Ridge Heating, Air Conditioning and Plumbing, Inc. v. Robert Brennen in which it held that a subcontractor doing renovation or remodeling work for a general contractor on a residence is limited in filing a mechanic's lien to the amount that is due the general contractor at the time the mechanic's lien notice is given to the homeowner. In the Ridge case the general contractor abandoned the project and the homeowner hired a second general contractor to complete the work. The homeowners contended that they did not owe the original general contractor any money and as a result the subcontractor could not obtain a mechanic's lien because of the restriction in the Maryland mechanic's lien statute limiting the recovery of a subcontractor to the amount owed the general contractor. This restriction had previously been interpreted to only apply to the construction of new residences. This restriction house now been extended to remodeling and renovation work.

Accordingly subcontractors should provide in their contracts for joint checks to better protect themselves and they should monitor their accounts receivable with general contractors closely to avoid the problem outlined in the Ridge case.

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