A subcontractor completes $25,000 of electrical work but is not paid by the general contractor. The general contractor was paid by the owner. What is the subcontractor's lien priority against the property?
Correct Answer
D) Lien rights limited to unpaid amount
In South Carolina, subcontractors have lien rights for the actual unpaid amount of their work, regardless of payments between owner and general contractor.
Why This Is the Correct Answer
Under South Carolina mechanics' lien law, subcontractors have direct lien rights against the property for the actual unpaid amount of their work performed. The subcontractor's lien is limited to the specific dollar amount they are owed ($25,000 in this case), regardless of what the general contractor was paid by the owner. This protects subcontractors while ensuring liens don't exceed actual damages suffered.
Why the Other Options Are Wrong
Option A: Lien rights only after general contractor files
Subcontractors have independent lien rights that don't depend on the general contractor filing first. They can file their own lien directly against the property for unpaid work without waiting for or requiring any action from the general contractor.
Option B: Lien rights equal to general contractor
While subcontractors do have lien rights, they are not necessarily equal to the general contractor's rights. The subcontractor's lien is specifically limited to their unpaid amount, whereas the general contractor might have different lien amounts or priorities based on their total contract value.
Option C: No lien rights since not in direct contract with owner
South Carolina law grants subcontractors direct lien rights against the property even without a direct contract with the owner. The lack of privity with the owner doesn't eliminate lien rights - subcontractors can still lien for their unpaid work performed on the property.
Memory Technique
Remember 'LIMIT': Lien rights are Limited to the actual unpaid amount - you can't lien for more than what you're actually owed.
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