Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes
Hey BP. I had a subpar GC. Late on work, not paying his guys, etc... I fired him and paid his guys myself. I have kept detailed notes, payment receipts for all draws, photographs, the scope of work, our contract, and I had him sign a release of lien waiver.
After I fired him I calculated the amount paid and the work completed to date. With late penalties, he technically owed me $12, which I waived. I sent him all of my documentation and he responded saying he was going to the city to put a mechanic's lien on my property.
I have the release of lien waiver and all my documentation. Is there anything else I should do proactively to protect myself and prevent the lien from occurring? Or is this simply a situation where I have to wait and see if he applies for a mechanics lien and then fight it?
Thanks, everyone in advance for any help you can provide.
Dan: As you know, laws re mechanics liens are very state specific, but in case a lien is actually filed, I wanted to share something we have here in New York State: In NY, if a mechanics lien is filed against the property, the owner has the option of serving upon the contractor a demand that the contractor file within 30 days an action in court to foreclose on the lien. If the contractor fails to do so within 30 days, then the owner may go to court to seek an order discharging the lien.
@Dan Krupa Take all of your paperwork and proof to a good attorney to find out what pain this may cause you. Even if you are in the right this can still impede your ability to sell the property or finance it.
I'm not an attorney or anything closely resembling one, but I'd probably run that scenario by one to make sure everything is clear on your end and get advice on what steps to take. Also, you should remind the GC that filing a false lien is either a felony or misdemeanor depending on the state. I'm pretty sure it costs some kind of money to file a mechanics lien (someone else correct me if I'm wrong) and I doubt he'd knowingly file a false case if he had to pay upfront fees and was aware such an act would be considered a crime. But I'd get on the horn with an attorney ASAP and get the info about how your state/city/county handles such things.
Dan: As you know, laws re mechanics liens are very state specific, but in case a lien is actually filed, I wanted to share something we have here in New York State: In NY, if a mechanics lien is filed against the property, the owner has the option of serving upon the contractor a demand that the contractor file within 30 days an action in court to foreclose on the lien. If the contractor fails to do so within 30 days, then the owner may go to court to seek an order discharging the lien.