How small a job is too small to place a mechanic’s lien? And when/why should I file it?I am a part time handyman, and have not yet had opportunity to take a job larger than could be completed in a weekend. However, I am bidding a basement remodel that will probably take a few months’ worth of weekends, and am being told by several people I should file a mechanic’s lien if I get the job. I thought mechanic’s liens were only for after a customer balks at paying.
Thoughts?
Tony
Replies
whoever told you to file a mechanics lien before you start a job should be avoided at all costs. A mechanics lien is only used after payment is due but not made, not before.
That's what I thought, too. Especially since I am in a rural area. I figure, if someone stiffs me, it wouldn't take long for everyone to hear about it. That's the best insurance I can ask for, 'cause it's free.
Tony
Interesting....I just Emailed someone from BT that lives near hereand told him about some A hole doctor in Llyod HArbor I took a mechanics lien out on for not paying me the last payment.
I heard through the grapevine from Katrina's office he does this all the time.
Dude sends me a registered letter after he gets the mechanics lien and says he's going to sue me if I let the lien go through whenever he sells the house....lol.....like, oh yeh, in ten years youre going to sue me for something that was total BS?
I said if there was something you didnt like then why didnt you call me to fix it....I called this jerk off more than ten times for my last payment and he never picked up my call till I had Katrina call him from her office (different phone number on caller ID)......you should of only heard what his wife said....she said I told her F U (the last day) I don't need your money....heyyyy...we're talkin bout a HinJew here.....I don't need your money....Oiy Vey.
HAte some of the people in this town.
BE well bro
a...The secret of Zen in two words is, "Not always so"!
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The concept is universal, but the details vary drastically from state to state.
In some state you need to provide a specific notice, in advance of starting, indicating the property can be liened if the job is not paid for. In others you don't have to.
Likewise some states require certain notice at the end if you have not been paid. Other you can just file the lien.
And the time period for doing this also varies a lot from state to state.
Thanks for the info.
I heard (from our plumber) that the excavator we use puts a lien on the property BEFORE he starts work. His (supposed) reasoning is that if the builder (us) doesn't pay for whatever reason, he'll be the first in line to collect...
If our excavator operated on this principle, I would have to question the wisdom of using him. If he cannot trust you, how can you trust him? So much of our work is based on this mutual trust. Without it, the work and committments we make are a tremendous burden.
Of course this could be just a story that the plumber is mistakenly passing on. It is easy enough to find out the truth.
To be honest, I really don't care whether he puts a lien on our property or not! We always pay him and if he chooses to protect his business in this way, than so be it. I will ask him, though, just to satisfy my curiosity :)
You should care if someone places a lien on your property. When you go to remortgage or sell, that lien's going to show up in your title search and you're going to have to prove it's been satisfied. Plus, it may show on your credit as additional and unpaid debt. And if you, for some silly reason, paid cash or can't find the check proving payment, or negotiated a different amount for some reason subsequently so that the check doesn't match the amount in the lien, your bank or seller is going to have to escrow money to pay off the lien. And if you can't find the lienholder when the time comes, that money sits, and sits, and you can't get it because...you had a lien.
SHG
I agree SHG, I wouldn't want the guy liening everything. On the other hand, I think it's just water cooler chatter. I can't imagine the guy spending the time running every other day to the county....
I'd have to know a lot more about the type of business, the state and their laws regarding liens, etc. In MI, it would be a huge waste of time to automatically file the lien. We have plenty of time after the last day worked to file them if we don't get paid.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
He can't place a lien without a bill (at last to the best of my knowledge)... so I doubt that he is actually filing a lien before the project begins. He can provide the property owner with a "notice of furnishing"... which is substantially different from a mechanic's lien. It is only the first step in a lien process.
It is not entirely strange for excavators to place liens before a project is finished. Due to time constraints on a subs's ability to file a lien... he is well within his rights to file a lien on the project if payment is not processed in a manner that protects his interest. (not that an initial draw for excavation would EVER get held up by the bank! COUGH COUGH COUGH)
The clock starts ticking the day that he pulls off after completing any particular phase of the job (however some excavators will "adjust" a grade with a bobcat... just to keep his "last day worked" within time frames). If that time frame expires... he looses his rights to file a lien.
I, for one, will never suggest to a guy with a bulldozer and a bad attitude not to protect his rights! LOL
Edited 2/23/2005 9:55 am ET by Rich from Columbus