May 24, 2012
Subcontractor's supplier filing lien on house
Dear Consumer Ed:
A supplier to a subcontractor filed a mechanic’s lien on my house. I have paid the contractor, and he has paid all of his bills. Yet my house is being held under a “cloud” from an unknown vendor to an unknown sub-subcontractor. The amount is just over $2,000. What are my options when dealing with a business that is trying to intimidate me into paying twice?
Consumer Ed says:
First, please recognize that there is a possibility this is a fraudulent Claim of Lien. Some scammers place mechanic's liens on real property in an attempt to get money when the house is later sold, claiming that money was owed for work done on the house, which in reality was never done. This type of scam is not uncommon.
Further, if the party which filed the Claim of Lien meets the legal definition of “a supplier to a sub-subcontractor” as you state, then a possible issue arises as to whether the supplier is contractually too remote to have the right to make out a valid lien claim. The test is whether your contractor knew of the supplier’s connection to the construction work at the time the materials were furnished.
If the supplier did make itself known to your contractor, then it becomes vital to determine if the contractor properly paid over monies ultimately owed the supplier and, if not, then you can be held responsible for ensuring that anyone contributing labor or materials to improve your property gets paid. Fortunately, the law provides ways that you may in some cases be able to use to get rid of a claim of lien that is improperly worded or filed. If you or your attorney identifies a defect in the lien, you may be able to convince the lien claimant to cancel the lien or, failing that, you can then file a Notice of Contest. Examples of possible defects include, but are not limited to: not filing the Claim of Lien within 90 days of completion of the work; failure to send a copy of the Claim of Lien via registered or certified mail or overnight delivery to the property owner within two business days after filing; and incorrectly identifying the property, its location or the name of the property owner. It is also possible that either the supplier or a party in the chain above the supplier has provided a partial waiver of lien in return for receiving a partial payment, and this should be ascertained as well.
A Notice of Contest is a document which can be filed in the real estate records of your county and mailed to the lien claimant, demanding that the lien claimant file suit or have the lien expire within 60 days. Forms for the Notice of Contest are contained in Title 44 of the Georgia Code.
If you are not planning to move in the next year, and the Claim of Lien is for a low dollar amount that you do not expect the lien claimant to file suit over, then you may want to just wait it out until the lien expires on its own within twelve months. A lot of liens are wiped out this way each year, because the party who filed the lien claim never files a lawsuit. This is especially true if the amount of the lien does not warrant the expense of a lawsuit.
If you do intend to sell your home soon, you may want to bond off the lien claim. The lien claim will then be against the bond instead of your home.
In any event, because the subject of mechanic’s liens is quite complex, this is especially a matter about which qualified legal advice should be sought before acting.