Question about Mechanic Liens
Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes
Question about Mechanic Liens
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Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
8yNot only can contractors place a lien on the property , but a subcontractor who hasnt been paid , as well as the supplier of materials who hasnt been paid . If the customer decides not to pay the contractor when due , a professional who has been in business a while doesnt hesitate to file a lien . Now if you pay your contractor , and he doesnt pay the electrician , the electrician will file a lien against your property . Same when the contractor doesnt pay the supply house , they will file .
31 Replies
- Chicago, IL · Member since 2017 · 79 posts · 39 votes8yMechanic's Liens can absolutely be placed on a property with seeing a judge. Also, be careful about not paying. In some municipalities, the contractor must be paid the agreed amount if he completed the job, irrespective if the job is done crappy or not. You may can negotiate with him instead. You may be opening up a sure way to have a judgement against you if you dont pay after a contractor completes the job... I hope this helps! Good luck!
- Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes8y
So.. sore topic for me because my BUTTdouche Ka Pampa (can I swear in a different language? If yes you suck, so my language doesnt count?!) contractor made our life hell because he tried to put a lien (but miserably failed!! Don't mess with a half crazed monkey!!
Here is what you have to realize doing liens. I am not touching a contractor to work for me that has put a lien out in the past.
but but but,
BUTT NOTHING!!
I don't care if he is in his right, or if it is well deserved. I have dealt with plenty of pampa contractors that are lien happy.
So think about it before you lien anything...
it can do a lot of harm for you and your business.
- Real Estate Broker · Provo, UT · Member since 2013 · 689 posts · 511 votes8y
In general, YES, your property can be encumbered without anybody ever seeing a judge.
Every state is going to deal with liens differently. Some states have a registry that a GC or subcontractor or service provider has to be a member of in order to lien a property, others don't.
Illegally placing a lien on a property can be a felony or a misdemeanor - but that probably doesn't stop it from happening.
- Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes8y
Originally posted by @Jerryll Noorden:
So.. sore topic for me because my BUTTdouche Ka Pampa (can I swear in a different language? If yes you suck, so my language doesnt count?!) contractor made our life hell because he tried to put a lien (but miserably failed!! Don't mess with a half crazed monkey!!
Here is what you have to realize doing liens. I am not touching a contractor to work for me that has put a lien out in the past.
but but but,
BUTT NOTHING!!
I don't care if he is in his right, or if it is well deserved. I have dealt with plenty of pampa contractors that are lien happy.
So think about it before you lien anything...
it can do a lot of harm for you and your business.
How are you supposed to know they have put a lien out? Is there some registry?
- Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes8y
Originally posted by @Blair Poelman:
In general, YES, your property can be encumbered without anybody ever seeing a judge.
Every state is going to deal with liens differently. Some states have a registry that a GC or subcontractor or service provider has to be a member of in order to lien a property, others don't.
Illegally placing a lien on a property can be a felony or a misdemeanor - but that probably doesn't stop it from happening.
As a homeowner can you fight the lien to prove it’s invalid?
- Hartford, CT · Member since 2018 · 5 posts · 1 vote8y
One recourse that you have is to go to Consumer Protection department in your state and file a complaint if the work was not done appropriately. ALWAYS verify the contractor's license number and their insurance. One interesting aspect on general contractors is that, in states where they should carry workers comp for all employees, many do not. Check on this and liability insurance. Insist on seeing these. If something feels off, ask for photo ID, also. We have had issues with tradesmen impersonating a licensed person and using someone else's number. When it comes to other trades like plumbing, HVAC and electrical, EACH PERSON is required to have a license, even an apprentice level employee. And, as I discovered, for something like hot water heating systems, there is a specific license, S1. A D3 isn't going to work, neither is a P1. They may know what to do and do it well, but when it comes to inspection requirements, they have to get the permit and inspection and it better be legal. On my townhouse, I had a minor issue with the boiler and the business owner sent an unlicensed employee to do the work. He botched things so miserably, he caused a small gas explosion and damaged my boiler. I called the city inspector who told me to file a home owners claim due to the explosion. They paid for a full replacement and took the contractor to court. Consumer Protection also got a complaint from me and this business owner has that red flag on his record that can then be reported to the Better Business Bureau. It does not stay forever, and it goes much worse for contractors who fail to make remediation.
If you get really messed up, taking the contractor to small claims or civil court is also an option. But don't wait for that lien.
- Real Estate Broker · Provo, UT · Member since 2013 · 689 posts · 511 votes8y
@Chris Purcell In my state you would have to either file a lawsuit against the claimant, or wait several years for the lien to drop off. unfortunately getting rid of a lien is either going to involve an attorney and / or will cost you money, or will take some time.
Again, every state deals with liens differently, so PA will likely be a little bit different from everywhere else.
- Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes8y
Originally posted by @Chris Purcell:
Originally posted by @Jerryll Noorden:
So.. sore topic for me because my BUTTdouche Ka Pampa (can I swear in a different language? If yes you suck, so my language doesnt count?!) contractor made our life hell because he tried to put a lien (but miserably failed!! Don't mess with a half crazed monkey!!
Here is what you have to realize doing liens. I am not touching a contractor to work for me that has put a lien out in the past.
but but but,
BUTT NOTHING!!
I don't care if he is in his right, or if it is well deserved. I have dealt with plenty of pampa contractors that are lien happy.
So think about it before you lien anything...
it can do a lot of harm for you and your business.
How are you supposed to know they have put a lien out? Is there some registry?
Indeed. The town records it.
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes8y
Not only can contractors place a lien on the property , but a subcontractor who hasnt been paid , as well as the supplier of materials who hasnt been paid . If the customer decides not to pay the contractor when due , a professional who has been in business a while doesnt hesitate to file a lien . Now if you pay your contractor , and he doesnt pay the electrician , the electrician will file a lien against your property . Same when the contractor doesnt pay the supply house , they will file .
- 8yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
If there is a dispute over non-performance or quality of work which results in non-payment, there is a deadline for recording the lien. The idea is issues get raised and resolved before the deadline.
Deadline is usually X days after the work is complete, or substantially complete, or whatever the local standard is.
The contractor records the lien in the land records.
Gimer Law516 Reviews - Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes8y
Originally posted by @Matthew Paul:
Not only can contractors place a lien on the property , but a subcontractor who hasnt been paid , as well as the supplier of materials who hasnt been paid . If the customer decides not to pay the contractor when due , a professional who has been in business a while doesnt hesitate to file a lien . Now if you pay your contractor , and he doesnt pay the electrician , the electrician will file a lien against your property . Same when the contractor doesnt pay the supply house , they will file .
Ok so the Electrician is owed by the Contractor and not the Homeowner, how is this stuff not seen before a judge first
- 8yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
Originally posted by @Matthew Paul:
Not only can contractors place a lien on the property , but a subcontractor who hasnt been paid , as well as the supplier of materials who hasnt been paid . If the customer decides not to pay the contractor when due , a professional who has been in business a while doesnt hesitate to file a lien . Now if you pay your contractor , and he doesnt pay the electrician , the electrician will file a lien against your property . Same when the contractor doesnt pay the supply house , they will file .
Sure the subs can file but if the owner paid the GC, the subs' liens may be unenforceable.
Always best to study up on local laws and figure out who has to do what, and when, to protect their interests.
Gimer Law516 Reviews - Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes8y
@Chris Purcell there is a short window to file the lien . In Md you have to send a notice of intent to file a lien . ( that one generally gets you paid) Then you file the lien . If the contractor had to wait for a court date that could be 6 to 12 months , the house could be sold by then . if the homeowner wants to contest the lien , he has to take the contractor to court .
And yes if the General doesnt pay the sub the homeowner is liable to pay. Until the electrician is paid, all the wires and panel in your house belong to him .
Is it fair ? to the contractors yes it is , they will get their money . Is it fair to the homeowner , not really ,you could basically pay twice for the work .
Thats why you verify all subs are paid and get a signed release
- 8yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
Originally posted by @Chris Purcell:
Originally posted by @Matthew Paul:
Not only can contractors place a lien on the property , but a subcontractor who hasnt been paid , as well as the supplier of materials who hasnt been paid . If the customer decides not to pay the contractor when due , a professional who has been in business a while doesnt hesitate to file a lien . Now if you pay your contractor , and he doesnt pay the electrician , the electrician will file a lien against your property . Same when the contractor doesnt pay the supply house , they will file .
Ok so the Electrician is owed by the Contractor and not the Homeowner, how is this stuff not seen before a judge first
The "judging" occurs before contracting. Knowing that the vendor can file a lien against your property for what is due under the contract makes it crucial to do your due diligence before agreeing to terms.
Gimer Law516 Reviews - Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes8y
Originally posted by @Tom Gimer:
Originally posted by @Chris Purcell:
Originally posted by @Matthew Paul:
Not only can contractors place a lien on the property , but a subcontractor who hasnt been paid , as well as the supplier of materials who hasnt been paid . If the customer decides not to pay the contractor when due , a professional who has been in business a while doesnt hesitate to file a lien . Now if you pay your contractor , and he doesnt pay the electrician , the electrician will file a lien against your property . Same when the contractor doesnt pay the supply house , they will file .
Ok so the Electrician is owed by the Contractor and not the Homeowner, how is this stuff not seen before a judge first
The "judging" occurs before contracting. Knowing that the vendor can file a lien against your property for what is due under the contract makes it crucial to do your due diligence before agreeing to terms.
Fair point, but it’s a little disturbing that these guys can file liens without any due process
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes8y
Originally posted by @Tom Gimer:
Originally posted by @Matthew Paul:
.
Sure the subs can file but if the owner paid the GC, the subs' liens may be unenforceable.
Always best to study up on local laws and figure out who has to do what, and when, to protect their interests.
One of my customers built a commercial building , the contractor was paid by the customer , but the sub that did the curb and gutter and asphalt wasnt paid by the general contractor . So the asphalt company placed a lien for $ 150,000 on the property . My guy had to pay that money , and he had to take the General to court , he won , but the general hid all his money .
Sub liens are definatly enforceable .
- Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes8y
Originally posted by @Matthew Paul:
Originally posted by @Tom Gimer:
Originally posted by @Matthew Paul:
.
Sure the subs can file but if the owner paid the GC, the subs' liens may be unenforceable.
Always best to study up on local laws and figure out who has to do what, and when, to protect their interests.
One of my customers built a commercial building , the contractor was paid by the customer , but the sub that did the curb and gutter and asphalt wasnt paid by the general contractor . So the asphalt company placed a lien for $ 150,000 on the property . My guy had to pay that money , and he had to take the General to court , he won , but the general hid all his money .
Sub liens are definatly enforceable .
This is absolutely horrifying. So should you pay all subcontractors directly?
- 8yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
Originally posted by @Matthew Paul:
Originally posted by @Tom Gimer:
Originally posted by @Matthew Paul:
.
Sure the subs can file but if the owner paid the GC, the subs' liens may be unenforceable.
Always best to study up on local laws and figure out who has to do what, and when, to protect their interests.
One of my customers built a commercial building , the contractor was paid by the customer , but the sub that did the curb and gutter and asphalt wasnt paid by the general contractor . So the asphalt company placed a lien for $ 150,000 on the property . My guy had to pay that money , and he had to take the General to court , he won , but the general hid all his money .
Sub liens are definatly enforceable .
This area of law is way too complicated for that statement to be accurate state-to-state, situation-to-situation.
If a sub files a lien it is NOT definitely enforceable.
Gimer Law516 Reviews - Investor · Menifee, CA · Member since 2015 · 534 posts · 216 votes8yTom Gimer if I’m in Escrow and a mechanics lien pops up on the title report for the property I’m going to buy for say $1000. Is this as easy to rectify by a demand or affidavit signed by the Contractor who placed the lien on the property and he would be paid at close of escrow??? Or does it need further attention from a lawyer or more county recording? Please tell me it is that easy lol I would say yes, BUT...................
- Chicago, IL · Member since 2017 · 79 posts · 39 votes8yThis is state by state, but in most states, if the GC gets paid and doesn't pay the subs or suppliers for the work or material they used to improve the property, the subs or supplier can definitely place a mechanic's lien on the property and the owner is responsible. Especially if their are no lien waivers involved. And, the owner of the property is responsible to pay them. In this case, the owner has to take the GC to court... The owner's contract is between the owner and GC... Here is another example, what if a sub hire a sub and they don't get paid from the GC... Both can place liens in the property. That's the subs only recourse...
- Chicago, IL · Member since 2017 · 79 posts · 39 votes8y@Mike Flora Yes! One can pay the lien to remove it...
- 8yJoseph ODonovanPro MemberProperty Manager · Ridley, PA · Member since 2017 · 427 posts · 449 votes@Chris Purcell I see you are in Pennsylvania. One way to avoid a Mechanics Lien in PA is to create a Waiver of Mechanics Lien endorsed by both owner and contractor and have it filed in the respective County Prothonotary. But this only applies to residential properties. Or, Mechanics Liens Releases can be prepared as well and filed with respective County Prothonotary. Either of these instruments give you some protection. For more info, see Mechanics Lien Amendments of 2007 or consult with an attorney as my explanation is a bit simplified.
- Investor · Cincinnati, OH · Member since 2012 · 506 posts · 331 votes8y
In Ohio, there's a few things that we've learned over the years on mechanic's liens..
- contractor (and subs) can absolutely file without seeing a judge- if they do file, you can force them to sue within 60 days or they lose the lien
- you can post a bond if you want to contest the lien but have a sale in process that you don't want to delay
- if you pay them in full, and you're worried about them because they demand even more money, you can record an afidavit with some specific information in it and if it records before they attempt to record the lien, they are prevented from doing so.
I'm not a lawyer, so check with one before you rely on this information. Your state is probably different.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes8yChris Purcell Yes a contractor can put a lien without seeing a judge. This is why you need to have YOUR OWN contract and not sign one from the contractor. A well written scope with standards is important. It is also important to get lien waivers from the contractor as part of any payment process.
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