Most people have never heard of a property lien. However, a lien against someone’s property is not uncommon in remodeling and home construction. It usually results in legal problems and frustrating financial situations.
What Exactly Is A Lien?
Let’s begin with a definition of a lien. A lien is a notice that is attached to your property that informs everyone that you owe money to a creditor.
Who Has The Authority To Place A Lien On Your Home?
A lien on real estate is common for contractors to ensure payment. Unpaid contractors, subcontractors, or suppliers can legally file a lien (also known as a mechanic’s lien) that may result in the eventual foreclosure of your home without adequate compensation. For example, you may be subject to a property lien if:
-You refuse to pay your contractor for work done on your remodel, and the contractor files a lien against the property for services rendered.
-If the contractor who worked on your project does not pay for materials, a supplier may file a lien against your property.
Why A Lien Can Cause Legal Problems
You do not want a lien on your property. One of the primary reasons is that a lien on your home obscures your title; a “cloudy title” is another term for it. Then, if you want to put your home up for sale or get a mortgage loan modification, you can do so. To clear the title, you must pay off the lien. Creditors understand that putting a lien on your property is a cheap and almost certain way of collecting the debt owed.
Some states require contractors and subcontractors to notify the property owner before filing a lien, but property liens can be filed without notifying the owner in others.
Check the Lien with a Construction Lawyer
“For the lien to be valid, contractors must follow certain procedures,” says Tampa attorney George Meyer, past chair of the American Bar Association’s Forum on the Construction Industry. “It’s not uncommon to discover that the lien is invalid due to a missed deadline or some other technicality.”
You’ll pay around $1,000 to have an attorney review the lien and, if it’s invalid, have it thrown out, usually within 60 days of the lien being recorded.
How Much Does Legal Action Cost?
Legal fees will likely range between $5,000 and $15,000. Smaller disputes may be better resolved through negotiation rather than going to court.
Suppose you’ve already paid your general contractor in full. As long as the general contractor hasn’t declared bankruptcy or vanished, you can sue him and file a claim with the state contractor licensing board for any losses caused by a subcontractor’s lien.
Conclusion
Finally, do not sign an affidavit of final release or make the final payment until you are completely satisfied with the work. After all, you’ve probably spent a significant amount of money and time on this project, and you and any contractors want to feel satisfied with the results. Talk to the experts if you want to make sure you and your properties are safe.
Bueno Plumbing takes pride in offering high-quality services at a reasonable price. We are a company of honest, hardworking people who strive to provide the best plumbing experience possible. Our commitment to customer service and satisfaction distinguishes us from our competitors.