I don’t know what state the OP is in, but in a lot of states the mechanics liens just sit on the title until the next time the property changes hands. Same with liens from law suits (say Macy’s has a dispute on credit card and sues, they’ll attach a lien to the property). In Colorado and many other states, the lien holder can’t file foreclosure on a small amount (say under $5000) but when it is time to change title, those creditors get paid. Usually by then no one can remember what the facts were for the original claim and they are small amounts so people just pay them off.
I don’t think you can assume they just go away after 120 days.
No I was not. I had a builder. They did subbing out. When they got the invoice, they forwarded it to me to pay. Toward the end, it took them so long to forward the invoice, subs began to send the bill directly to me. No idea what kind of contract the builder and the plumber had. I think they should sue the builder. Instead, they are coming after me, an easy prey?
No. It would be unsecured debt. They can’t take anything. It would be like if you were delinquent on a Credit Card. The biggest enforcement that they have is reporting to the Credit Bureaus. They could also sue and get a court judgment. But this is all if they send it. That is a big if.
I would reach out to builder and determine what the builder contracted with the plumber to provide. If the builder specified what the plumber was to provide and install and the plumber did that but it was inadequate for your needs that is on the builder, not the plumber.
Technically, it is between the builder and the plumber as far as I can see. They had a contract, not me. But I’m the easy pick. They are both at fault. The plumber told the builder where the pipe is going. When the plumber came back to install the pipe, the space he marked out was given to the electrical work. The plumber was forced to alter to the current route. The plumber should have requested the electrical moved instead of rerouting. The builder should have kept the space for the plumber. Moving around electrical wires is a lot easier than routing stiff 2" PVC pipes. Priority should have been given to the plumber.
If the builder/contractor chooses not to pay the money owed to the plumber, then the plumber should of filed the lien the property. They should have also filed a lawsuit to collect on the lien within the state specified time limit.
The builder should have bllled you and then the builder should have paid the plumber, so now you have to be careful of any double payments. If you were to pay the plumber, the builder could hypothetically also bill you for the same balance. The builder’s lien rights should have also have expired, but here in CA, the builder and sub have different lien timellines.
In this instance, if you do decide to make a payment to the plumber, then here in CA, a joint check would be issued to both the plumber and builder. If the builder is owed nothing, then he’ll just sign the check and the plumber will deposit the whole thing. This method makes sure both the builder and sub have been paid in full.
Here in CA, I’ve not ever seen a collection agency try to collect a debt, where the mechanics lien expired. Could it happen or has it ever happened? No idea, but I’ve not ever seen or heard of it.
If the plumber has passed the GC exam and been in business for a few minutes, filed the lien in the first place, then the plumber and builder know how to foreclose on the lien within the time specified by law. IMO, no judge in the future will rule in favor of the plumber after they let the lien period expire. Why would they do that?
Depending on state law, subcontractors can file mechanics liens provided they did work at the property, even if the contract is between the plumber and your builder.
I second the recommendation to speak with your builder. Because there’s an issue with the performance of your water heater, and it was spec’d by either the plumber or the builder (or both) the problem needs to be rectified at that level before you pay the remaining amount.
Sounds like you had an unprofessional GC. He wasn’t paying his subs on time. He wasn’t keeping you up to date on what was going on. He didn’t ensure the right material was planned for and installed. He didn’t handle this dispute with the plumber.
If I read between the lines correctly, you took the GC’s word that the plumbing problem with the soaker tub and venting was caused by incompetence by the plumber. With the poor way the GC apparently ran the project, I would not be so quick to believe the GC is blameless in this plumbing problem. Thus, it’s not fair to not pay the plumber when you didn’t hire the plumber, you didn’t tell him what should have been done or what you wanted the (plumbing part of the) final project to accomplish, and you still may not have spoken to him to clear the air.
I hope you’re not using that GC any more. He’s the one that got you in this mess.
If it was me, I’d pay the plumber and go after the GC.
In New York State, if the debt is not reduced to a judgment (the result of a court proceeding), you’ve got bupkus and a collection agency has to be very careful not to fall afoul of the Fair Debt Collection Act (which is federal law.) Ironically, threatening to sue under circumstances where the creditor would not be likely to is one of the forbidden acts.
@circuitrider You are absolutely correct. The state allows subs to file a lien against the property. I should stop whining “little me”. Good to know about the federal law on collection behavior.
The Fair Debt Collection Practices Act (FDCPA) applies to a person/entity collecting debts for another, such as a collection agency or even a lawyer. They have rules to follow but they can follow all the steps and try to collect the debt. A person/company can collect their own debts and probably isn’t subject to the FDCPA. Some states have statutes that mirror the federal act, and those could apply to a licensed business in that state.
I worked for a lender that wasn’t subject to the FDCPA and I wrote tons of letters explaining why were weren’t subject to the act, yadda yadda, and then would explain why we DID follow it and why we weren’t in breach.
The lien may not be valid, but that doesn’t mean the contractor/collection agency can’t bring a suit. It is likely a contract matter, and usually those can be sued on for 5-7 years. It would be an unsecured debt (if the lien is voided) but it is still a contract claim.
If you paid a general contractor, make it do its job. The general contractor should be dealing with subs, liens, poor workmanship. Otherwise why have a general?
Yes, the homeowner can be sued for the $5,000 owed to builder/plumber. But the homeowner can countersue for defects, workmanship, design, etc. One side will argue that they haven’t been paid (builder/plumber) and the homeowner will lay out all the problems that haven’t been completed yet. The homeowner can also add “mental anguish and emotional distress.”
It’ll be much, much cheaper for the homeowner, builder and plumber to take care of the remaining issues, get paid and move on. Penny wise pound foolish.
I met with an attorney. My big mistake was to ask them to remove the lien. I should have sat tight a few more years. I didn’t know they have no obligation to remove the expired lien since it was a valid lien when they filed it. They have to remove it if it was an invalid lien. I told them I am withdrawing my request. No idea if it will calm them down. I spelled out how it all came about and that it is really between them and the builder not me.
The lawyer said they won’t send it to the collection agency. Nothing much will come out of it since it is not a real debt like unpaid bill. They could sue me, likely in a small claims court.
The two ways to remove a mechanics lien, that I’m aware of as a non-attorney, is for the contractor to record a release of the lien or the homeowner can petition the court to remove the lien from record.
@sushiritto Now, I know. I’ll petition later. My lawyer said title companies simply ignore expired liens. He also thought since I don’t have a direct contractual relationship with the plumber, a lawsuit may not stick. Not sure about that. I am taking time to think about my next move.
Based upon the limited info mentioned here, IMO, I’d write the builder and cc the plumber, via certified mail, return receipt requested, or via overnight service, with the following:
you and the builder have a contractual relationship, not you and the plumber,
a list of your concerns or problems that have already been addressed to date, which you appreciate very much,
a “punchlist” of items or concerns that will need to be addressed for final payment to be disbursed,
once the punchlist has been addressed by the buider, you will remit final payment,
if don’t hear from them, within 7-10 days +/-, to schedule the work, you will hire another contractor,
the amount paid to this other contractor will be deducted from the balance of $5,000 or if the repairs exceed $5,000, then the builder gets $0.
set a timeline, maybe 30-60-90 days, for the work to be done.
Once you know the final cost to fix whatever needs to be fixed, then I’d deduct that cost from the balance of $5,000 and send that money to the builder with another letter explaining that your concerns weren’t addressed, you hired another contractor as your previous letter stated, paid them and include a receipt for the work. And include the builder’s final payment, less what you paid to the other contractor.
Of course, all of this is subject to the terms of the original contract and authorized extras. Be as fair to the builder as one can be, just in case it goes to court one day.
I don’t think either of these are accurate, although both are state law specific. In most states the contractor who performs the work at the property can put a lien on that property for work performed.
For example in Florida this is how the process works. Title companies usually aren’t comfortable with any recorded liens on the property because it clouds the title.
As another example PA has a fairly robust Mechanics Lien Law.
Obtaining a release of the lien is important from a title standpoint.
@sushiritto It’s been more than a year since I talked to the builder. He has disappeared from the area. Not sure how that figures into the case. From what I heard, my builder stopped working with the plumber well before that.
@vpa2019 The lien has expired. They can’t force the lien. The lawsuit if they go that route has to be contractual? I guess? I think that’s what the attorney was saying. They may not be able to sue me since I didn’t sign anything with them. The time to sue me would have been before the lien term ran out. I will petition and get the lien removed anyway so that my heir doesn’t have to deal with it. This will be my forever home.
Now that I am less scared, I don’t see how they will bring a lawsuit. It is $5,000 before deducting the cost to remedy their mistake. Looking at invoices from 2020, it looks like the cost will add up to more than $3,500. Construction cost has gone up through the roof since. I’d be lucky to get it fixed under $5,000. They won’t get much even if they win.