Contractor Liabilities -- How to minimize it.

Ok, so we all are in RE business. We buy the properities and hire ppl to fix them up. This is where my concerns comes.

  1. what is the best way to minimize the liabilites/suets from contractors and people who work for them?

  2. What is the best form out there that we can have them sing so that we are released from any/all liabilites? Anyone whould like to Share?

  3. What can we do to avoid having a lien on the property because general contractor has not paid his guys who actually did the work?

Any related issues/concerns are welcome on this thread as well as expert advise and experiences.


  1. the best way, don’t hire them, but that doesn’t really solve the problem :slight_smile: Hire them as employees, rather than contractors, but that starts a whole new problem. Make sure that they like you from the start, so that they’re not inclined to sue you at the drop of a hat. Get good insurance! Hire an attorney!

  2. You will never be released from all liabilities. Simply can’t be done, even if you’ve got them to sign a paper saying that it is so. Again, have an attorney draft the form in a way that protects you the best and have good insurance!

  3. Don’t hire a general contractor in the first place. You can be a general contractor on your own stuff (at least here, check your state’s laws to be sure). That way you know it’s paid. If you do hire a GC, then you can draft in your contract that he must show you where he has paid his subs before you make your next payment to him. If they have not been paid, then you can pay them directly. It is also possible to put into the contract that you will only pay the subs directly. Everything is negotiable in a contract, remember.