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Mechanics’ Liens
By Matt Unangst, 23 Jan 11:09
• Protect people who work on your home
• A lien can be placed to force payment
• Homeowner can be forced to pay twice if a contractor does not pay subcontractors
• Use a respectable contractor to avoid such issues
• Consult an attorney if you face any mechanics’ liens
Contractors, subcontractors, laborers, and suppliers who work on homes can be subject to the whims of a homeowner for their payment. In order to protect people who provide labor or material to repair, remodel, or build a home, the State of California has created the California Mechanics’ Lien law. Under this law, anyone unpaid for services rendered for work on your home can place a lien on your property. The lien cannot be removed without legal proceedings or full payment.
Contractors and subcontractors file liens separately. Even if you have paid the contractor in full, he/she may not have paid a subcontractor, material supplier, or laborer for the work done. In this case, the subcontractor, supplier, or laborer can still place a lien on your property, holding you responsible for paying twice for the same services.
California law holds the homeowner responsible for paying twice in such a case because the homeowner is in a better position to bear the loss. This is based on the theory that the work done or materials supplied increased the value of the property, thereby making the property owner wealthier than he/she was before. If you are faced with having to pay twice for services or materials related to your property, you will probably wind up having to pay first; go to court with the contractor later.
To avoid such a circumstance, make sure that your contractor is reputable and has enough capital to complete the project. You can also issue checks that are payable jointly to each person who is to be paid instead of paying one lump sum to the contractor. A similar measure is to pay in installments.
Mechanics’ liens can sometimes be avoided if they have been incorrectly filed. A subcontractor or supplier must follow certain written rules when submitting a lien and failure to follow these rules may result in the lien being invalid.
The best thing to do if confronted by a mechanics’ lien is to consult an attorney. An attorney can help you with getting the lien cleared from your property and help to restore you to good standing with your title company.
KEYWORDS: mechanics’ lien, title insurance, contractor, subcontractor, supplier
SEE ALSO: Title Insurance
Tags: mechanic's lien contractor legal law