FAQ: Can I File A Lien If My Workmanship Is In Dispute?

Short Answer:  Yes.

Long Answer:  This post was inspired by a question asked by a homeowner in Washingon over on Avvo.com.  Her question was essentially this:  “Can a contractor file a lien on my property even when I’m not satisfied with the work?”

You can read her question and my answer to her on the Avvo site.

Construction projects can sometimes be a real complicated mess. It feels like disputes are almost inevitable, as so much can go wrong, personal tastes and tolerances are always in play, and there are so many parties working on top of each other that it’s complex to assign blame.

Contractors and suppliers frequently find themselves in situations when they believe their work was performed properly, but others on the project contend otherwise. Money is withheld from the contractor or supplier for “workmanship issues.”  What’s a contractor or supplier to do?

Well, the mechanics lien remedy is actually a really great option in this scenario.

The reason is simple: proving that workmanship is below par will require expensive and extended litigation, as these types of issues typically require a full-blown trial.  However, when a mechanics lien is filed, it ties up the property and has consequences to the owner and prime contractor immediately; no trial required.

The only remedy for the property owner or prime contractor to fix a mechanics lien problem is to pay the lien claim or file an action challenging the lien (they can also bond it, but this is not really hurtful to the claimant as we explain here).

The big worry for mechanic lien claimants is if an action is filed in court to have the mechanics lien removed. If this action is filed claiming the lien is improper because of workmanship issues, the challenging party will have a very, very difficult time prevailing. The reason is simple: courts typically do not entertain factual arguments that require full-blown trials in summary mechanic lien removal proceedings.

So to the extent there is a dispute over workmanship at the property, the judge presiding over a mechanics lien challenge will likely rule (and should rule) that the lien was properly filed and will stick around until the workmanship issues are decided by a judge after a full trial.

Which means two things for the purposes of answering this FAQ:

1.  You can file a mechanics lien even when workmanship is in dispute; and

2.  It’s probably a good idea to do so, and will likely create leverage for you to negotiate a deal.

  • http://www.levycraig.com Rob Pitkin

    My experience has been that owners frequently claim workmanship issues with contractors who file mechanic’s liens. So, the best course of action is usually to file the mechanic’s lien and be prepared to litigate the workmanship claims. Hopefully, your contract contains a “prevailing party” attorney’s fees clause that will enable you to recover your attorney’s fees in litigating the case.

    • http://www.zlien.com Scott Wolfe Jr

      Good point Rob, that I failed to mention in this article: owners ALWAYS claim workmanship issues :). That is my experience, too. An attorney fees provision is certainly helpful, as this raises the stakes for both parties if they are tempted to play games in litigation.

  • http://NorthshoreSiding.com Ken

    Couldn’t the owner, if there was no reason to sell or refinance and didn’t have a construction lender involved, simply wait out the effective time period of the lien (I think it is 7 months??)?

    If contractor moved to enforce lien, then she gets her opportunity to explain to judge (or preferably negotiate a simple resolution w/ contractor instead of litigation risk and assoc. costs).

    If contractor lets lien expire, there you be!

    Is this faulty thinking in Washington?

    • http://www.zlien.com Scott Wolfe Jr

      Hi Ken. Thanks for the comment. You make a good point, and this is something that owners very frequently do. If they just wait, the lien will eventually expire, and then there’s nothing to worry about. The lien itself isn’t going to cause any problems unless the property is sold, transferred or refinanced, or something like that. However, this can become a bit more complicated if: (i) there is a lender on the project, in which case the construction lien will cause it fits; (ii) the lien is filed by a sub or laborer, and not the prime contractor, as the property owner will have to pressure the prime to clear it up because it leaves the owner vulnerable to have to pay folks twice.

      On a run-of-the-mill small construction renovation job, where there is only one contractor and the owner, mechanic liens don’t pack quite the same punch. They are still a great tool b/c owners hate liens, you secure your debt, etc., but they don’t have the far-reaching consequences. In these types of projects, the scenario you present is a real possibility.

      By the way, the lien effective period in Washington is 8 months 🙂 Thanks again, Ken. Good to hear from you again.

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