What Do You Need To Know About Mechanic’s Liens?
When it comes time to buy or sell a new home, the unwanted surprise of a mechanic’s lien may show up during a title search and impede the closing process.
This cloud on a home’s title can be resolved with the help of a South Florida residential real estate attorney. Homeowners sometimes aren’t even aware of them until the closing process.
A mechanic’s lien is placed by a contractor looking to receive payment for services they are allegedly owed, providing them with a form of payment security if there is a balance once a project is completed.
What Exactly is a Mechanic’s Lien?
Say you hired a contractor to install new granite countertops in your home. You were given an initial upfront quote and did not expect to pay more than that.
Once the project was completed, the contractor claims that they had to perform additional work outside of the original scope and that it took longer than expected.
You didn’t request this additional work, but they claim you owe an extra $2,000. You refuse to pay, and the contractor files a mechanic’s lien with the county clerk.
This lien shows that a future homeowner could owe the amount to the contractor, meaning it would be difficult to get someone to buy your home with that obligation.
In other cases, a subcontractor may have been hired by a general contractor and weren’t paid, which would allow them to potentially file a mechanic’s lien on the property.
How Liens Can Be Avoided
Mechanic’s liens can be avoided altogether by negotiating with the contractor – they are typically a result of negotiations breaking down entirely. This might result from ignoring contact attempts from the contractor or simply disagreeing with their estimate on the amount owed.
Through mediation, an attorney or a professional in the construction industry can work with both parties to reach a fair settlement. Options may include payments over time, a reduced balance, or the opportunity for more work for the contractor.
Once a mechanic’s lien has been placed, it can still be dealt with, although it becomes more complicated. The vast majority of mechanic’s lien cases do not go as far as litigation, as there are several ways to get one removed.
Options may include obtaining a construction lien bond, attempting to negotiate again with the contractor, petitioning the Florida Circuit Court and other steps.
If you have any questions about title defects such as mechanic’s liens, contact Mark Schecter, a top residential real estate attorney in South Florida, at (954) 779-7009.