The following question was submitted to John Roska, an attorney and writer whose weekly newspaper column, "The Law Q&A," runs in the Champaign News Gazette.
I had someone put a deck on my house. I paid the amount of the estimate, plus some extra for work needed to complete the job correctly. I paid less for the extra work than the contractor wanted, but there was nothing in writing besides the original estimate. When I tried to refinance my mortgage, I found out they filed a mechanics lien on my house for the amount that I refused to pay. Is that legal? How do I get rid of it?
The contractor should have told you about the mechanics lien. The law says they’re supposed to, but not doing that probably doesn’t make the lien invalid. One way or another, to undo the lien you’ll have to resolve the charge being disputed.
The Mechanics Lien Act has been around since 1825, and helps contractors get paid for making improvements to property. In 1990, it went from Mechanics’ to just plain Mechanics. A mechanics lien provides security, or collateral, for a debt.
The lien makes the property that was worked on collateral for the debt. If the property owner doesn’t pay, the contractor could go after the property. In theory, a mechanics lien can be foreclosed upon just like a mortgage.
In practice, it doesn’t often go that far. Homeowners rarely lose their homes because a contractor foreclosed on a mechanics lien. Usually, the issue is resolved because of the threat of foreclosure, and the “cloud on title” created by the lien.
A contractor has 2 years from completing their work to record a lien against the homeowner. Within 10 days of recording a mechanics lien, they’re supposed to send or personally deliver written notice of that fact to the homeowner.
That notice has been required since 2010. Before that, a mechanics lien was somewhat notorious for being the secret lien.
Although contractors are now supposed to notify homeowners when they record a mechanics lien, failing to give notice doesn’t make the lien invalid. But if you can prove that the secret lien caused you some kind of damage, the lien is reduced by the amount of damage—or maybe wiped out entirely.
The contractor has to put up or shut up by suing for the lien claim within 2 years of completing work. The same deadline they have to record the lien. If they don’t, they lose the lien.
You can speed things up by sending the contractor a written demand to sue. If they don’t sue within 30 days of getting that demand, the lien is lost.
In any court case, the contractor must prove you agreed to the extras, and that you agreed to their cost. Regular court rules apply to that case.
If the contractor wins in court, you’ll have to pay off the judgment to release the lien. If he loses, he should release the lien.
A contractor who fails to release a paid-off lien, or who refuses to release a lien that became stale because he didn’t sue within 2 years, or within 30 days of a written demand, can be liable to the homeowner for $2,500 in damages and attorney fees.