Avoiding A Mechanic’s Lien
Making Sure EVERYBODY Gets Paid
A Mechanic’s Lien
A mechanicis a tradesman, an artist, or anyone who works with “tools”, i.e. carpenters, electricians, plumbers, roofers, and an assortment of others.
A lien is a legal claim on real property until a debt is paid.
If you employ a tradesperson or contractor to work on your home and then, following a dispute, you refuse to pay, the tradesperson has the right to file a lien. A lien is a claim on real property, such as your house. Rather than the tradesman simply demanding payment from the individual property owner, he/she is able to file a mechanic’s lien making the real estate itself (your house) responsible for payment.
Lien laws are based upon the long-held presumption that, as a direct result of the mechanic’s efforts, during the course of a remodeling project, the property is theoretically being improved (and its value enhanced). Therefore, the property owner AND the improved property are held responsible for satisfying all debts incurred during the course of the improvement or repair.
Avoiding Liens In Remodeling Projects
By James Carey & Morris Carey
“Pay me or I'll slap a lien on your property!” are 10 words you definitely don’t want to hear when remodeling your home.
The threat of a mechanic’s lien is occasionally made by an angry, frustrated contractor to a defensive home owner over a dispute about workmanship, money, or both in remodeling or repair projects.
The ability to file such a lien, however, is not just restricted to the general contractor. A lien can be filed by any company or person who can demonstrate that labor or material to improve or repair your home were supplied and for which they have not received payment under the terms of an agreement.
The mechanic's lien law ensures that those who work on your home get paid for their services. If not, they have legal recourse that ties up your home and property until they are paid or the lien is otherwise resolved.
Any home owner who employs outside labor and material for the improvement or repair of his home is vulnerable to this law. Because this law is based on state statutes and civil codes, you should consult a local attorney for specifics in your area.
Your understanding of this law could prevent you from paying twice for any phase of your project and safeguard you from losing your house to a disgruntled creditor in a nasty foreclosure sale because a material or service bill was not paid.
While it is true that the threat of a mechanic’s lien is usually associated with the general contractor, it is not an action that is exclusively the right of a general contractor. The list of prospective lien claimants may also include:
Even if you pay your contractor as agreed, you can still be hit with a mechanic's lien if your contractor fails to pay a material supplier, subcontractor or individual who furnished labor for your project. The same holds true if a subcontractor doesn't pay his material supplier. For example, you hire Acme Construction Co. to build an addition to your home. Acme hires ABC Roofing to roof the addition. ABC buys the roofing material from XYZ Roofing Supply. You pay Acme, Acme pays ABC, but if ABC doesn't pay XYZ, you could end up paying twice for the roofing material.
Though there are means to prevent a mechanic's lien, your best protection has more to do with your contractor's ability, business experience and integrity -- and your ability to get along with him -- than any other aspect. Your focus should be on finding a good contractor.
Since a mechanic's lien can happen even with the best of contractors, consider the following options for protection.
The mechanic's lien law is complex. Honing design plans and picking appliances, cabinets and flooring are fun and necessary parts of planning a home-improvement project. Choosing a good contractor and understanding the mechanic's lien law are necessary steps in protecting your piece of the Great American Dream and avoiding home-improvement chaos.
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