Just send it to the lawyers already?

8 Replies

I bought a three unit apartment building sometime earlier this year. Was just going to redo it and sell it.

Hired some electricians to take care of it. After they inspected it, they gave me a verbal estimate of $4,500.

Couple months went by, bunch of things happened and I got tied up in other business, $14,000 bill shows up.

I went to look at it... Honestly... they completed maybe $2,000 worth of work. Everywhere it's start and stop, picking here, picking there, just the service was completed.

I question their labor logs. Which are ridiculous. Looks like some days they're charging up to three hours of driving time. They'd come to the site, clock out to another job 40 mins away, and clock right back.

Excessive trips to parts store half hour away for stuff that should be on their truck.

Months later still insisting they've got $6,000 of material there. I know for a fact there isn't as I've inventoried it. Less than half that. Another electrician said tear everything out. 

I talked to a lawyer. He said if they put a lien on it, it could be up to two years! See if they'd settle...

They wanted $10,000. Said nah...

State of Maine allows them 90 days since last time there to put a lien. They started threatening, managed to drag it past that 90 days. Got a invoice the other day that shows they bought material on 10/8. They've been fired since 8/8.

Someone today said I have a babyface, and they're probably just trying to take advantage of me. I play dumb when I meet contractors, I guess I do that to sorta gauge their honesty. They have a positive online reputation. It's not my first rodeo, just first time with something that might end up in court. Been to court once, it's expensive. 

I know the answer is just give it to the lawyer. Just throwing this out there while I mull it over and finalize it in my head. Everything is in a folder ready to go. Luckily I didn't put any money down for them and I signed nothing (could've been a blessing, but in this case probably better off). 

I was getting all excited as I got two single family homes to wrap up in December and then I could revisit the apartment building. Now I'm not sure if they've caught onto the 90 day thing and that's what the invoice from 10/8 is from to try to string it out. I know it'd be a relatively easy win, but I'm not going to touch the building until I know it won't get held up. 

Don't know your lien laws there, here it it's 90 days from "last substantive" work.  Just buying materials, or replacing just a cover plate, wouldn't restart the clock.

It seems really odd to me that there is no payment plan for weekly payment plan in place. And also, why would you hire someone that would charge you by the hour to begin with? And to purposely not sign a contract up front and to play naive? That is just waiting for trouble if you ask me.

Originally posted by @Wayne Brooks :

Don't know your lien laws there, here it it's 90 days from "last substantive" work.  Just buying materials, or replacing just a cover plate, wouldn't restart the clock.

"The mechanic's lien is created by operation of law when the services or materials are provided. However, the lien dissolves unless the party claiming the lien files a certificate of lien with the registry of deeds of the county in which the property sits within 90 days of the last supply of labor or materials."

A lawyer said they can file a lien if they just change a doorknob. That with the above makes me curious about buying materials. They even sent a copy of the receipt from the supply house for the 10/8 one, finishing items and light boxes.

I don't see how simply buying materials on 10/8 would reset their 90 day clock, especially if they were already fired on 8/8. They haven't "supplied" the new materials to you, have they? The purpose of the lien is to protect their interest in the labor and supplies that they have sunk into your property. But if they haven't given the materials to you, what do they need the lien for?

Not licensed in Maine, and this isn't legal advice.

Consider this is part of a learning all investors have to learn. You should always signed a written estimated contract specify what is involved, estimated hours and total cost signed. 

You follow the contractors on a daily routine trying to get them commit a task completion on time. You need to monitor their progress. After that project is completed you pay what was agreed. Majority contractors will take on another task on top of yours when not watching (All realtors do that also). But if you give them a deadline and a bonus the outcome is different.   A friend who had her Palo Alto, CA home rebuilt spend 2 years very much FT going to the planning, permit, contractor, inspection, even picking materials etc.  One needs to know if stick trick does not work, use carrot which is a bonus. She offered $10K on top to have it completed in time and saved a lawsuit or two. $10K may sound a lot but that home increased value by 1.5M more so it is an investment. The lawyer fee is avoided having a satisfied investor and content contractor.

@Abraham Kauffman Yeah, our law is written eesentially the same.  Case law however, not the written statute, has more clearly defined "work".

I'm also confused how they could claim "providing materials" 2 months after "they were fired"....can you document the firing as real and enforcable?  Were the later materials actually "incorporated into the house" (I assume they were not acting in any way as just a "material supplier" so simply buying them and even delivering them without installing them would not count as work).

I also assume your state has a process for “binding off the lien”....usually placing cash in an escrow to remove the lien from the property. Usually only necessary if you are selling or need to refinance.
This takes the pressure off to resolve immediately. The contractor still has statutory time limits to actually file suit to enforce the lien, or it dies. Contractors filing inflated liens rarely actually follow thru with the suit.
Shady contractors like to use the lien to scare owners.....no need to let that happen.

If you suspect unscrupulous business practices report them to your state’s licensing board.

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