Supplier to sub-subcontractor filing lien on house

May 24, 2012 23:48 by Consumer Ed

Dear Consumer Ed: 

A supplier to a sub-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.

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Contractor won't finish home improvements

March 2, 2012 23:40 by Consumer Ed

Dear Consumer Ed: 

I hired a contractor to do some remodeling on my home. I paid for the entire job so that he could purchase the supplies needed. He did most of the work, but will not finish the job.  What can I do to get him to complete it?

Consumer Ed says: 

You don’t say what kind of service agreement you had with the contractor (verbal or written).  If you have a written contract, you have a much clearer legal leg to stand on.  However, even if it was a verbal agreement, you may still be able to sue the contractor.  We strongly recommend that you consult a private attorney.

Other than suing or threatening to sue, you may also be able to force the contractor’s hand by reporting him to the State Licensing Board for Residential and General Contractors at www.sos.ga.gov/plb or by sending a written complaint to: Professional Licensing Boards Division, 237 Coliseum Drive, Macon, GA 31217-3858.  The Board doesn’t oversee all types of complaints about contractors, but it does handle problems with fraud, deceit, gross negligence, repeated or persistent incompetence, or intentional misconduct.  If 90 or more days have passed since the contractor has stopped work without giving you a reason why, then you may have a claim that the contractor has “abandoned” the remodeling. The Board can’t force the contractor to finish the work, but it has the power to impose punitive measures that will make it difficult for him to continue working legally, such as probation, license revocation, or requiring restitution of money advanced for supplies and not used to finish the remodeling.

If you report the contractor to the Board, but he still refuses to complete the work, you can file suit to recover your money, plus damages for the additional cost of completing the remodeling.  Alternatively, you can sue the contractor to simply recover what you paid him for the unfinished work.

Finally, you can submit a complaint to the Federal Trade Commission at www.ftc.gov or to the Governor's Office of Consumer Protection at www.consumer.ga.gov or by calling 404-651-8600 or 1-800-869-1123.

For future reference, you should never pay the entirety of the agreed price in advance of having the work done.

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Changing a contract after you've signed it

December 21, 2011 00:00 by Consumer Ed

Dear Consumer Ed: 

My husband signed a contract for replacing our flooring that did not include the dates of service, payment schedule or whether the company would be responsible for disposing of the old flooring. They have not started the work yet. Can I change the contract before they start?

Consumer Ed says: 

This is a legal question, so the first thing you need to do is consult with an attorney about your rights in this situation. You should be aware, however, that unlike some states, Georgia does not require home improvement providers to include in their contracts the price of their services, the start and completion dates, and all work that is to be performed.  If your contract does not contain those specifics, it could give you a legitimate basis for asking your contractor to clarify those terms in writing.  If the contractor refuses to do so, you may have to stick with what the current contract says, (unless an extreme circumstance occurs, e.g. the contractor breaches a crucial term of the contract or delays beginning or completing the work for an unreasonable amount of time).  Assuming your contractor does agree to make the requested changes, ask him to add an additional section to the contract that addresses the changes and be sure you and the contractor both sign that addendum.

In the future, before entering into any kind of service agreement, you should read it carefully to make sure that its important terms are very clear.  Be sure that you fully understand your obligations and the obligations of the other party.  If you don't understand the contract, or if you have any questions, have an attorney review and explain the contract to you before you sign it.

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