What does free and clear of all encumbrances mean?

What does free and clear of all encumbrances mean?

In property law, the term free and clear refers to ownership without legal encumbrances, such as a lien or mortgage. So, for example: a person owns a house free and clear if he has paid off the mortgage and no creditor has filed a lien against it.

What kind of liens can be put on a house?

Types of Property Liens

• Voluntary and Involuntary Liens. Creditors, such as a mortgage or car lender, can ask borrowers to put up the purchased property as collateral as part of the condition of the loan.
• Creditors With Involuntary Liens.
• Judgment Liens.
• Other Types of Involuntary Liens.

Are you liable for subcontractors?

Usually, anything that subcontractors would be liable for, general contractors may also be liable for (with the caveat that if the contractor has to pay for damages, the subcontractor who is legally responsible will often reimburse the general contractor).

How do subcontractors get paid?

Some subcontractors are paid with a lump sum of money by their employers. For example, a technical writer contracts with a company to write a manual. The company agrees to pay that writer a certain amount of money to write the manual. The writer then writes the manual for the company and submits it.

Can a subcontractor sue an owner?

Under this doctrine, the subcontractor or supplier can sue the property owner for payment if the owner has not paid the general contractor for the particular work or materials. The theory is that the owner would be “unjustly enriched” if he were allowed to reap the benefit of the work or materials without paying.

What is illegal subcontracting?

Illegal, too, is “labor-only contracting,” in which “the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal.” (

Who is responsible for paying subcontractors?

Subcontractors have what is called “privity of contract” with the general contractor. The general contractor also has privity of contract with the client. 1) The general contractor is obligated to pay the subcontractor, even though the owner has been slow or late in paying him.

What’s the difference between a subcontractor and a contractor?

When clients hire you to work on a specific project or on a freelance basis, you are usually considered a contractor. You provide the labor, services, and sometimes whatever equipment is needed to get the project done. Subcontractors are companies or individual people that you hire to help you complete a project.

Do subcontractors have to sign a contract?

Once a contractor is hired by a business, they can then hire subcontractors. Subcontractors will sign an agreement like the one the contractor signed with the company, but the subcontractor will sign with the contractor.

Who qualifies as a subcontractor?

A subcontractor is a worker who is not your employee. You give a Form 1099 to a subcontractor showing the amounts you paid him. The subcontractor is responsible for keeping his or her own records and paying his or her own income and self-employment taxes.

Is it better to be a subcontractor or employee?

Subcontractors are best for projects that require specific skill sets, while employees are great for on-going, long term projects. However, they don’t have to be mutually exclusive in your small business. You can choose to hire one or the other, or a mix of both, depending on your industry and growth goals.