Imagine this scenario: You invited a contractor to help you with your remodeling project and things were going smoothly from the beginning, but later on you’re not totally satisfied with his work and you didn’t pay the contractor the entire bill for the improvement of your property. Then the contractor decided to put a lien on your property and or home. What should you do in such a situation?
What’s A Construction Lien?
Construction lien occurs when a contractor does work and you hold some of his money because you believe he doesn’t deserve what he requested due to poor work. It can be for whatever reason but this the lien is used when the homeowner does not pay for the services that were rendered. Because of this, he placed a lien on your house as security for an outstanding debt; the contractor is making a claim on your property for his unpaid services. If you don’t take care of this lien, with time the lien may be used to require you to sell your home to cover his expenses.
Contractor liens aren’t a complex process. Contractors can put a lien on any property when they believe they’re denied work compensation per the contract that was drawn up for the work that he has done. Each state in the United States has its own rules and regulations regarding construction liens and the rules vary from one state to another significantly. In some states, the lien expires within ninety days while other states it takes longer than that. Before taking any action you should check with a lawyer to understand how construction liens work and how to deal with it if this scenario happens to you.
Is Your Construction Lien Valid?
Contractors must comply with some requirements before putting a lien on any property.
* Homeowners must be given preliminary notice within some time frame after finishing the work.
* The contractor should be able to state clearly the minimum amount of detail on the debt.
* All liens must be filed at local court or a registrar of deeds within a fixed time frame after the completion of the work and the homeowner has accepted the work done and began to use it.
* The contractor also must start a lawsuit to start collecting debt within a specified number of days to the filing of the lien.
How To Get Rid Of A Construction Lien
Once a construction lien is recorded you have to go through a long process before the eventual requirement of selling or refinancing your home to satisfy the lien. If it is found that you are innocent and the allegations have not been proven against you by the contractor you can remove the lien by visiting a registrar of deeds or county courthouse to remove such lien.
If you, however, know that the lien is valid you should try settling with the contractor before things get worse that would lead to the necessity of selling the home. It is a good idea to reach an agreement before the issue is passed on to the courthouse. Most contractors spend a lot of money when filing a lien, therefore, they’ll charge you a lot when they file a lawsuit against you during debt collection. We all know how difficult it is to deal with lawsuits. It is worth trying to do as much as you can to resolve things quickly with the contractor. If you have taken care of the problem between yourselves then the contractor must withdraw the lien.
Handling A Contractor Lien – Negotiating Terms
In order to avoid any disputes between you and the contractor, you should spend some time to review contract details carefully in the sense that you fully understand all the terms. If it’s a big contract you should consider consulting a lawyer that will translate things for you. The deadline for the completion of the home improvement must be defined and if the contractor fails to meet the deadline you may delay payment. It is also beneficial for you to negotiate to pay the contractor with a credit card, this provides an easy way to reverse the charge in case the contractor fails to deliver as promised. Even if there is no refund you can contact the credit card merchant to withhold the funds because the services haven’t been delivered.
As said earlier trying to resolve the issue out of court is a resolution that is the best way to go when it comes to dealing with a lien. When the matter reaches court there are going to high stakes. Even a small dispute can incur charges of up to $5000, without taking into consideration of other fees, such as attorneys’ fees. If the dispute exceeds $5000 you may need to file in circuit or county court. If you have a lien on your home, contact Massey & Duffy to help you resolve the matter quickly. Call us now for a free consultation.