Lien Only For Lienable Work

by | Jun 15, 2021 | Getting Paid, Liens

Liens are great tools to help contractors get paid what they’ve owed. Do work to improve a real property and you can rely on your lien rights to secure your payment.

When a general contractor entered into a contract to build a house, he hired a number of subcontractors to complete the contracted work. The interior designer wasn’t one of them; she was hired directly by the owner. For some reason, the interior designer processed her invoices through the contractor.

When the owner missed making certain payments to the general contractor because of a disagreement over some change orders, the contractor recorded a claim of lien against the owner’s property. Multiple suits followed, with subcontractors suing the general contractor for non-payment and the general contractor claiming against the owner for breach of contract and foreclosure of his lien. The owner resisted, claiming the lien was fraudulent.

You see the general contractor included the interior designer’s unpaid invoices in his lien amount. But those were labor and materials costs that were not part of his direct contract with the owner and would not be lienable.

The contractor’s lien was thrown out because it included a claim for work admittedly not performed by the contractor. This was as significant a mistake as willfully exaggerating the amount of any lien or preparing a claim of lien so carelessly as to amount to an intentional overstatement. And such a mistake not only risks the loss of the lien but a likely award of fees. Not a good result for sure.

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