Question for homeowners who used contractors

[DMD]

If a contractor does work for a homeowner and is paid in full, is it still possible that a subcontractor that he used can not be paid by him and place a lien on the homeowners house for the amount? There was no signed agreement between the homeowner and the subcontractor - how can he do that? If he can, what is to stop him from just placing a lien any home?

[Caveman_Nick]

If a contractor does work for a homeowner and is paid in full, is it still possible that a subcontractor that he used can not be paid by him and place a lien on the homeowners house for the amount? There was no signed agreement between the homeowner and the subcontractor - how can he do that? If he can, what is to stop him from just placing a lien any home?

 

I would imagine the question you are asking is specific to Texas law.

 

If a guy is placing a lien on your home, is it for a significant amount?

 

Do you have paperwork that backs up your having paid the contractor in full? Is there a specific agency that handles liens in your state? Can you provide them with this proof of payment to have the lien lifted?

 

Otherwise, if the amount is significant I would suggest contacting an attorney.

[Ursa Majoris]

If a contractor does work for a homeowner and is paid in full, is it still possible that a subcontractor that he used can not be paid by him and place a lien on the homeowners house for the amount? There was no signed agreement between the homeowner and the subcontractor - how can he do that? If he can, what is to stop him from just placing a lien any home?

I believe the answer is Yes in Minnesota. The sub needs to show he is unpaid but this has happened here before - main guy takes the money and goes tits up, sub nails the homeowner. Pretty sure this is common across the country.

[Furd]

If a contractor does work for a homeowner and is paid in full, is it still possible that a subcontractor that he used can not be paid by him and place a lien on the homeowners house for the amount? There was no signed agreement between the homeowner and the subcontractor - how can he do that? If he can, what is to stop him from just placing a lien any home?

 

Probably. It depends on Texas law, as my esteemed colleague noted.

 

Michigan has a Homeowner Construction Lien Recovery Fund for exactly that situation - to provide a homeowner some relief when a sub doesn't get paid. The Fund would pay the stiffed subcontractor/laborer and the lien is discharged.

 

Unfortunately, the Fund recently went dry.

[WJW]

As caveman said it may depend on state law, but in CA the answer was yes and my understanding is that this is pretty common and likely to be valid in most states. Advice to those in the future, this is why you demand that your contractor provide you with paid invoices for all subs he uses. If your contractor won't agree to do that then find another contractor.

[Perchoutofwater]

Yes the sub can come after you and put a lien on your house. We make all our trade contractors sign a Subcontractor's/ Material Supplier Affidavit before we will release any funds to them. The affidavit has to be notarized, basically stating that any and all sub-subcontractors or material suppliers have been paid in full.

 

ETA: I'm in Texas

Edited November 18, 2009 by Perchoutofwater

[Missoula Griz]

If a contractor does work for a homeowner and is paid in full, is it still possible that a subcontractor that he used can not be paid by him and place a lien on the homeowners house for the amount? There was no signed agreement between the homeowner and the subcontractor - how can he do that? If he can, what is to stop him from just placing a lien any home?

 

 

The answer is yes here in Montana. I have had to deal with this situation a few times in the last year. Subs place mechanic liens on title. In order to get it removed, the borrower/owner has to get a lien waiver signed by the sub, pay it off, or get it bonded and deal with it in court-this is in a situation where they are doing an end loan from a construction loan. If no loan is in place than the lien will sit on title until home is sold in future and sub will be paid at that time.

 

It’s a complete racket. For instance, General contractor fires the painter because of poor quality of work. General pays painter for work completed. Painter is pissed and records a mechanic lien on subject property feeling he did not receive enough pay from GC.

Edited November 18, 2009 by Missoula Griz

[AtomicCEO]

This happened to us in Cali. We did an install for a restaurant and we subbed to a national service provider. Then the national company subbed to a local company. Apparently, the national never paid the local, and the local put a lien on the restaurant.

 

It didn't really seem fair, but at that time the restaurant hadn't paid any of their bills to us either, so I told them to go nuts with that lien. Sick 'em, tiger.

[SEC=UGA]

Yes, they can lien your property. That is why it is very important to choose a reputabale GC. Lien laws in states vary greatly as to how much the lien can be "worth". Some liens can be for the full amount of the contract that is not paid, in other states the lien amount can not exceed the amount left in the draw from the bank at the time the lien is established (if you had a 200K loan and 170K had been distributed you would have a balance of 30K. If someone were to file a lien, in certain states, at the time the balance was 30K, regardless of how much their work "cost", they would onl;y be able to lien you for 30K.)

 

Also, you need to determione if the lien was filed in the appropriate and timely manner with proper notices given.

 

You've gotta go after the GC and quick before others get into him.

Edited November 18, 2009 by SEC=UGA

[DMD]

The lien is not for much - just $1k. But as an ignorant homeowner, I was not aware that this could happen or I would have gone the affidavot route which a friend of mine in the indusry tells me will not prevent anything but would make the contractor criminally liable.

 

This is all an area that Joe Bob Public has no idea exists.

[Delicious_bass]

The lien is not for much - just $1k. But as an ignorant homeowner, I was not aware that this could happen or I would have gone the affidavot route which a friend of mine in the indusry tells me will not prevent anything but would make the contractor criminally liable.

 

This is all an area that Joe Bob Public has no idea exists.

Cant you just have one of your goons make this sub dissappear?

 

If not, I'll do it for $500 and a free membership for next season

[SEC=UGA]

The lien is not for much - just $1k. But as an ignorant homeowner, I was not aware that this could happen or I would have gone the affidavot route which a friend of mine in the indusry tells me will not prevent anything but would make the contractor criminally liable.

 

This is all an area that Joe Bob Public has no idea exists.

 

 

He still may be criminally liable. Though, you would have to have a pretty strong case to larceny after trust or outright fraud. Cost you more than a grand to prosecute the dude.