Investor · Washington, DC · Member since 2014 · 2 posts · 0 votes
I have a property that was intended to be renovated and sold in Maryland. There are 3 other partners involved and we created on LLC, each with 25% ownership. Unfortunately construction was being done by one of the partners but no formal contracts were signed. My job was to invest $ in the project and costs keep escalating.
I'm wondering if i can file a lien for the amount i've invested so that i get paid back first in the event we have to sell it at a loss. I already have the primary lien because I purchased it from the hard money banker after it was in default to avoid high interest rates. Do I need everyones consent to file the lien?
Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes
11y
I don't know the legal answer to that, but from what you've described I don't see how you'd lien it. Sounds more like a partnership problem than a deed problem. With the security deed you're already holding all the cards, though.
Just need an agreement to add whatever to that debt I would think. There's no sale without a payoff letter from you on that first mtg. Nobody is going to be able to go around you, you just need to communicate to your partners and have s meeting of the minds on your extra contribution and expectation.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
11y
Alien....no. Your LLC operating agreement should address this. Are You putting in the money for all the extra costs, or are the three other partners contributing too. 4 partners on a flip is a lot of splitting profits.
Investor · Washington, DC · Member since 2014 · 2 posts · 0 votes
11y
Unfortunately everyone else has run out of money so I'm basically carrying the project now to finish. Myself and one other investor has contributed $. The other partner is a real estate agent who put the deal together and a contractor to do the work. Unfortunately the contractor didn't actually sign a contract with us and he's killing the project with mistakes. I'm also worried he may want to file a lien himself for the "extra" work he's doing even though it's his fault we are so over budget and time. He didn't file for permits like he should have so we have huge delays/fines. Can he file a lien?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
11y
You, and whoever else is putting in additional money, should have agreements in place before doing so. If your contractor partner has an arms length type contract between his co. and the LLC, he has the same rights as any other contractor, unless your operating agreement somehow prohibits it. Sounds like you need an attorney to review your situation.