My contractor and I have an ongoing issue with the final payment of the contract and has filed a mechanic’s lien. The contractor demanded final payment before all of the items in the contract were finished.
Our main concern, among others, was the fact the contractor wanted final payment before they took all of the trash they piled on my patio for the duration of the contract. I wanted them to remove it before I paid them.
Now the contractor has stated that he is putting a lien against my property since I haven’t paid. I had to pay out of my own pocket for the trash to be removed due to my neighbor and HOA complaints. I’ve requested that the contractor not only reimburse me for that cost but also finish all of the outstanding issues like tucking the carpet around tile they laid and personal tools they needed to borrow and never returned.
I also had to put all of the outlet faceplates on myself because they left in a hurry due to another contract they started, according to one of the workers. I also wanted to be reimbursed for the materials that I paid for but they are claiming they paid for.
The contract states that I pay for all materials and any contractor costs would be approved by me. They are not abiding by the contract that they themselves wrote up and provided to me to sign. The contract also states that all disputes will be settled through arbitration but they went straight to a mechanic’s lien. What are my options? – Michael B.
A: I hear many variations of this story – where the work is incomplete or faulty and the contractor wants final payment. Usually things get resolved through negotiation and compromise before anyone takes legal action.
It’s unfortunate that the contractor took the step of filing a lien. This is a pressure tactic to force you to pay. It certainly raises the blood pressure of both parties and reduces the likelihood of negotiating a mutually agreeable outcome. It’s a heavy-handed approach akin to filing for divorce.
However, it’s still not too late to negotiate, and this is probably your fastest and least expensive option. Take a deep breath and remember that this is a business decision, not an emotional one. Choose the strategy that costs you the least in terms of time, money, and stress.
You can propose that you will pay a reduced amount to settle the contract and have the lien removed. Deduct a reasonable amount for trash removal and other incomplete work and provide documentation for these charges. In most cases, the contractor would rather settle and move on than have to deal with enforcing the lien.
If negotiation does not work, you have a few options (depending on state law) in increasing order of cost, time, and aggravation:
- You can contest the lien directly and try to have it removed. This is typically handled by the county courthouse.
- You can file a lien bond (surety bond) with the help of an insurance company.
- You can hire a lawyer to fight the lien in court. Not sure how this would play out with the arbitration clause, but lawsuits and binding arbitrations are very costly and time-consuming.
For a lien to remain valid, the contractor must follow state law precisely and meet all deadlines and notification requirements. The biggest deadline is for the lien claimant (the contractor) to file a foreclosure action against you before the lien expires. However waiting out a lien can be risky because, in theory, you could lose your home to foreclosure. This is pretty nasty stuff.
Since your dispute with the contractor has entered the legal arena, the best advice I can offer is that you should consult a lawyer. Mechanics liens are technical instruments, different in every state, and very specific in terms of the legal requirements for both parties. If deadlines are not met and proper notifications are not sent by certified mail, either party could be found at fault.
More importantly, your lawyer can speak with the contractor’s lawyer and usually work out a reasonable settlement. They both know the rules of the game and are not emotionally involved.
Nolo Press, a good source of legal self-help advice, offers these suggestions.
Best of luck!