November 04, 2010

Subcontractor placing lien on my home!

Dear Consumer Ed:

I paid a roofer to repair some damage to my roof. Now, several months later, I’m being contacted by one of his workers who is threatening to place a lien against my home because the roofer never paid him. Can he do this?

Consumer Ed says:

Unfortunately, he probably can. Under Georgia law, people who contribute labor or materials to improve a new or existing home are allowed to file a claim of lien against the homeowner if they do not get paid, even if the homeowner actually paid the contractor. Lien claims like these are limited in their effect: they do not show up on your personal credit report and expire by law within 12 months unless the subcontractor actually files a lawsuit to collect the money.

If a lien has been filed against your property, there are many potential defenses available to you. You can demand a cancellation if the lien itself is defective. For instance, the person filing the lien may have signed a lien waiver, incorrectly identified the property, or even filed the lien in the wrong county. It may be helpful to have an attorney check the lien for defects. Alternatively, if you’re not planning on a move, you can simply wait twelve months until the lien expires and take your chances that the lien filer will not want to incur the expense of a lawsuit. 

If you will be moving, you may want to bond off the lien claim. This discharges your home from the lien and instead puts the claim against the bond. This clears the title quickly and easily, without waiving the dispute. The person still has twelve months from the time the claim became due to sue for recovery. 

You can also file a Notice of Contest, which gives the lien filer sixty days to file a lawsuit; if he fails to do so, the lien expires.

You may have additional defenses based on the work performed or the amount claimed in the lien. However, this requires showing that payments were properly disbursed to all persons providing labor, materials and services. Only your contractor may have this information.

If you are concerned about a claim of lien filed against you, you should also consult with an attorney.

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