Lien Question - Posted by Carl (IL)


#1

Posted by JPiper on December 03, 1998 at 03:00:42:

Carl:

You came to right place. This exact issue had recently happened to me.

How easy is it to file a mechanic?s lien against your property?? It?s amazingly simple. HOWEVER, it needs to be done correctly. Every state has differences in their mechanic?s lien law?.so I would recommend that you acquaint yourself with the law in your state. Use www.findlaw.com for this purpose. In my state the contractor needs to provide the owner with a ?Notice to Owner?. This has to be delivered to the owner at a specific time and needs to in a certain sized type and with certain wording as specified in the law. Without this notice properly delivered and signed, any filing of a mechanic?s lien is illegal?.and could be a felony in my state. So check your law out?.or contact your attorney regarding this for specifics.

Can you stop the contractor from recording the mechanic?s lien?? Not to my knowledge. In my state it is a simple matter to file the lien, even if it is done incorrectly and/or illegally. But improper filings carry consequences for the contractor.

In my state, once the lien is filed, the contractor has 6 months to file a circuit court action in which he proves his claim and the owner has an opportunity to defend against the claim. If the 6 months elapses without this suit, the lien is automatically void by law. The contractor can also sign a lien release, or waiver of lien. Obviously if it goes to court, the court will decide the merit of the lien.

In your case what I would do is carefully document the work that was performed. Taking pictures or videos of before and after is the best. In the absence of before pictures I would have 3 contractors come out for the purpose of submitting bids to complete the work. That way you could document to an extent what isn?t done. Any evidence you can provide would help to prove a breach of contract claim if it comes to it. It would also be helpful if you could prove the time delays. These could give rise to damages resulting from the contractors breach. Again, talking to an attorney would be helpful.

Finally, if the lien is filed you could negotiate a deal with the title company to insure around this, in return for escrowing money covering the mechanic?s lien pending it?s resolution. In my case what I negotiated was their withholding of 1 1/2 times the amount of the lien, pending resolution. I had a written agreement drawn up that covered this escrow and the terms of any future disposition of these funds. Basically the funds will be released in either 6 months when the lien expires, or with the presentation of a signed lien waiver, or upon presentation of a favorable court action.

Talk to a qualified real estate attorney. They can quickly describe the law in your state.

JPiper


#2

Lien Question - Posted by Carl (IL)

Posted by Carl (IL) on December 02, 1998 at 19:57:41:

I am doing a rehab and need to terminate an electrical contractor because he has stopped showing up to finish the job, (about 1 1/2 months since he was last there). I have a signed proposal from him to do the work, he has completed approximately 2/3 the work and has been paid 2/3 the money. Let’s say he gets upset, how easy would it be for this contractor to place a lien on my property if he feels he is owed more money? Can I protect myself from getting a mechanics lien from this contractor? What does it take to get a lien off of your property besides payment? My concern is that I will be refinancing in about a month or so and don’t want to have any lien issues.