How To Fight A Mechanic's Lien On A Property
A Mechanics Lien is utilized by contractors hired to perform work on a property which assures them of being paid. One important consequence is that failure to pay the contractor could delay or cancel a sale of the property. Of course, the contractor is expected to perform the job to expectations. If not, the owner needs to know how to fight a Mechanics Lien on a property.
This applies to a contractor assignment anywhere on the subject property and not only the house (or commercial structure). There is no differentiation between interior or exterior work.
When faced with a Mechanics Lien on a property, it is important to understand the difference between a General Contractor and a sub-contractor. A General Contractor is there to oversee an entire project and should act as the responsible party.
Let’s suppose Bill and Betty are having both their kitchen and two bathrooms updated. Kitchen work includes installing a new “island” and countertops, along with a new refrigerator and stove. They are having a new shower and toilet fixture installed in each bathroom.
KNOWING THE SCOPE OF THE PROJECT
A project of this magnitude costs thousands of dollars, and requires the work of several laborers. Typically, this project would start with a General Contractor. The “GC” would coordinate the hiring of a skilled shower door installer. Someone else that specializes in toilet fixtures would handle that. Same with the kitchen where the island and countertops may be performed by specialists.
Sinks and toilets need to be disconnected, installed, and reconnected in proper working order.
Sub-contractors might include:
- Electrician
- Plumber
- Painter
- Installer(s)
- Landscaper(s)
- Supervisor
In addition, there are time and costs associated with the selection and purchase of all appropriate materials. All materials need to be delivered as promised and be according to specifications.
When a General Contractor is hired, the GC is to be paid the entire amount. This includes the materials, the labor, and appropriate coordination and supervision. Because of this, the GC is responsible whether problem is wrong material measurements or a plumber causing a damaging leak.
Many GC’s hire other companies or licensed outside individuals to perform the work on their behalf. If Joe’s GC hires Jerry as a plumber, and Jerry damages a fixture, it is Joe’s responsibility.
However, if Bill and Betty hired separate companies to install the shower and the kitchen countertops, the responsibility changes. In this instance, each contractor answers directly to Bill and Betty. Each contractor could conceivably file separate liens on the property.
DETERMINING THE RESPONSIBLE PARTY
Another factor is establishing who is responsible for any and all permits regarding the project. Some contractors will handle this, while others prefer that the property owner acquire it or them.
Keep in mind that the property owner is ultimately responsible for property permits. Failure to have proper permits usually adds to the time and expense of a project.
Consequently, the key step in knowing how to fight a Mechanics Lien is to know the source of the problem. Ideally, the property owner would have requested a “lien wavier” prior to the start of the project.
A “conditional lien wavier”, which can be used with construction and contractors work, is the most viable option. It can be issued by either party. The purpose is to promise payment once specific conditions are met. For example, a contractor paving a driveway gets paid 50% of their fee prior to starting. The remainder is to be paid upon successful completion.
Under this plan, the contractor has only until the final check is cashed to be able to file a lien.
With or without a conditional wavier, the property owner needs to be certain of the source of a problem. Although we cannot and do not provide legal advice, an owner can attempt to negotiate an agreement or settlement.
If direct negotiations fail, the owner needs to take the offending contractor(s) to court. The courts ultimately decide the status of the Mechanics Lien.
This is why it is important to know how to fight a Mechanics Lien on a property. The time and (likely) additional costs can easily delay an attempted sale and/or create substantial debt.
Successfully fighting the lien(s) allows for a quicker and smoother sale of the subject property.
