Is a lien only for money owed or.........
11 years ago
last modified: 11 years ago
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fired a subcontractor, worried about him filing mechanic's lien
Comments (8)Did you have any sort of written agreement with this character? You didn't ask about this but...I don't know the exact laws in your state regarding late payment penalties but in Texas, where there is no agreement regarding interest on unpaid bills, the maximum rate that can be charged is 6% per year and that can only begin to be applied 30 days after the debt becomes due. So, even if you did actually owe him the amount he is claiming (which I doubt), absent a written agreement to a higher interest rate, I'd suspect that if he tries to assess a 15% late payment penalty for every day that an alleged bill goes unpaid, he would be in violation of your state's usury laws. Next, each state has very specific laws regarding mechanic's liens and the time limits in which they MUST be filed. You should probably do a little research or talk to a lawyer in your state regarding mechanic's lien laws. Once the time limit for filing a lien (which can be as short as 30 days) has passed, check your county records to see if a lien has been filed against your property. If not, you can rest easy about that. If he has filed a lien, then you'll need the attorney to help you deal with him. Assuming everything you've said is true, my suspicion is that this guy won't really file a lien. He sounds like the kind of shoddy workman who deliberately low-balls bids and then, once he has the job, attempts to hijack more money from his customers. Chances are, if you start checking, you'll find he has a long history of doing the same thing to other customers. The last thing he wants is an actual court battle where you could allege "fraud in the inducement" regarding the contract and start delving into his prior business practices to show that he has made a pattern and practice of doing the same sorts of things to others. Also, you'll want to keep watch on your credit reports so that if he files anything with a credit bureau, you can dispute it so it doesn't negatively affect your credit score. And BTW, once the deadline for him filing a lien against your property has passed, do report him to the BBB. Unless you complain so that other homebuilders have at least some chance of finding out about what he did to you, he'll be free to keep on screwing other people around. Good luck....See MoreWe're In but now our GC wants to lien on our house!
Comments (25)Kats, that is some real chutzpah. I feel for you. We've been in our home for a little more than a month after a 13-month build (that was only supposed to take 9 months) - the delays were excruciating because they would have been avoidable by someone with even a modicum or organizational ability, which our GC does not have. He's a lovely guy on a personal level but not nearly as good a contractor as he thinks, and we sorely need a break from the unrelenting pressure. He still has not finished one major item - two sets of steel stairs that go from our rear porches to our rear terrace, as well as several small punchlist items. There's always an excuse. He's disorganized, but resents it when we step in to organize, or take any kind of action to impose a deadline - this from a guy who is routinely hours late to scheduled meetings and never met any deadline in the construction process, even ones he imposed himself. Our new theory this week is to give him whatever time he needs (within reason) but to limit his intrusions into our home life to one day a week, arranged in advance, with a "one hour" rule - if he's not here within an hour of when he is supposed to be he has to wait until the next week. Apparently that is being just as "mean" and "difficult" as complaining about unmet deadlines - he thinks we should be there 24/7 for him to do what he wants, or we should just give him a key and trust him, in any event on his schedule. No way - he has needed watching every step of the way. We've done way more than our share of work that he should have done - I feel for you there too. He's been inches away from being fired more than once on this job, and we've talked to a construction lawyer several times about really contentious issues. In the end, even though we have the cash leverage (we still owe him more than our 10% retention, primarily because he's too lazy to do a requisition), it just hasn't been worth it to fire him. Assuming that you don't need clean title for a takeout of your construction loan, it sounds like you have little to worry about. I don't have huge faith in the court system, but even then I find it hard to believe that a judge would buy his argument that his subs are not under his control. Also, if he's not done, how in the world could he be owed a completion bonus? The courts are always a risk, but in this case it seems to me a pretty small one. If you do have to close any new financing that requires title work, you may need to think about it a bit more strategically. Do everything you can to get your loan closed without a lien being recorded. Otherwise, my advice to you is the advice I have a hard time taking myself. It's only as big a deal as you make it. So hire a lawyer and instruct him or her to deal with it in as cost-effective a manner as possible. Then let it go and enjoy your new house....See MoreSub-Contractor Lien Releases
Comments (28)quote" And the bad part from an owner's perspective is that you have lien recourse while we're just screwed. "quote If you don't pay, I (the GC) have the right to not only Lien against your property but also have right to sue you to pursue a Judgment against you because you were in a direct Breach of Contract because there is an Agreement(contract) between us that was not fulfilled on your end. If I neglect to pay a sub for services rendered, even though I was paid for his service's, he only has the right to pursue you for a Lien. Since there's no direct Agreement between you and him it is simply Implied that he's due compensation for his services, and since the GC didn't pay he can only Lien, he can't pursue a Judgment against the Property Owner. If he made me sign an Agreement for the service at a job of mine and I didn't pay, he could pursue me for a Judgment too. In 15 years of Mechanical Contracting I never had a builder sign a Agreement. I now have several Subs, who thanks to scoundrels within the industry, make their Builders sign a contract on each individual job. Over the past 15 years the only Sub who has always done this is my Granite man. This guy was burned by home builders so many times in the late 80's and early 90's that I was amazed that he was able to stay in the game. This guy is awesome and didn't deserve it just as equally as the subs who worked for pool builders that didn't get paid too. My concrete guy got burned by a pool builder named Bruce, who was confused on a thread with a good Bruce here a few months back, for 55000 over the course of 7 months and 10 unpaid jobs. He confided in me that he had to leverage an equal amount against his business line of credit to just stay in the game. It took him over 150000 in new invoices to rebound back to zero. This, my internet friends, means that he did 200000+ of work for free because he didn't follow protocol on these unpaid invoices. It Heartbreaking to everybody involved except the pool builder. just-a-pb quote" He did this with 20 to 30 contractors on many homes he was building. "quote If these subs had gotten together they could have formed a class action suit and pursued criminal charges of Intent to Defraud against the home builder. The only times I've ever seen builders go to jail is when the ripped off customers and/or the unpaid subs got together and pursued the GC as a Class Action (group) suit. This year 3 pool builders were arrested and Indicted on these charges. When this goes to court and the Jury hears that each of this men had several companies prior to these that did the same thing, I'm hoping they'll be sentenced to the maximum duration of incarceration. Deliberately collecting money with no objective of completion for the buyer or compensation of the service/supplies providor of the project, IMO and the interpretation of the law, is a criminal not a civil offense. See ya, Kelly...See MoreContractor is threatening a mechanics lien-- should I be scared?
Comments (15)As I referenced earlier, under California law, as a licensed general contractor, you can only record a mechanic’s lien after all work contracted for is completed, or you no longer have the ability to complete the work (project has shut down, you have been terminated, etc.). If you record a lien before the work is completed, you have created a premature lien, which is not valid and you must remove it. Therefore, it would be your decision to terminate the contract that would expose you to the possibility of a lien. When you terminate a contract you must immediately pay the GC for all the work he has done. If some of the work was unacceptable you must make that clear in writing when you send him what you think you owe him. You should also make it clear why you terminated the contract. A rejection of work by the building inspector will be helpful. Everything should be documented. If the amount in dispute gets down to a few hundred dollars it will probably not be worth it to him to file a lawsuit to enforce the lien which he must do within 90 days of filing the lien....See More- 11 years agolast modified: 11 years ago
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