Q: We hired a contractor to redo our kitchen and paid him every dollar we owed, on time, right through the final check. Last week, we got a certified letter saying the company that supplied our cabinets was never paid and has now put a lien on our house. We paid in full. How is there a lien on our home, and do we really have to pay for those cabinets twice? — Renee
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A: This can be extremely frustrating and catch people by surprise. The short answer is that in Florida, and in many other states, an unpaid subcontractor or supplier can place a lien on your home even though you paid your contractor every penny, so long as the lienor follows the applicable notice and recording rules. Before you write a second check, though, there is a chance this lien has a weak spot, and you may have more leverage than you think.
The people who build your project and supply the materials usually have no contract with you. Your deal is with your contractor, and these laborers and suppliers also have a deal with your contractor. So the law gives them a claim against the thing their work improved, which is your house, when the contractor takes your money and does not pass it down. It feels backward, but somebody has to absorb the loss when a contractor pockets the money, and the law puts that risk on the homeowner who picked the contractor.
Start with the contractor because this is his mess to clean up. Send him a written demand to pay the supplier and clear the lien, and review your contract, because most require exactly that. If he is licensed, a complaint to the licensing board gets attention in a hurry, and if he is bonded, there may be a claim. A contractor who is still in business and wants to keep his license will often make this go away rather than fight it.
Next, scrutinize the lien itself. These claims live and die on technicalities. In Florida and many other states, many non-privity lienors must serve a notice to the owner within the statutory time period, and the lien itself must be recorded within the statutory deadline. The amount must be correct, and the party filing generally must comply with the licensing and notice rules that apply to the project. Miss any of it, and the lien may be unenforceable.
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That is where your attorney earns their fee. You can force a lienholder to either sue quickly or lose the lien, and you can usually post a bond to remove the claim from your house so you can still sell or refinance. Both are expedited processes with strict deadlines, so do not delay.
For anyone reading who has not yet started their project, one habit helps prevent this problem. Never hand over any payment, especially the last one, without a signed release from every subcontractor and supplier who sent you a notice, plus a sworn statement from your contractor confirming that everyone downstream has been paid. Always carefully check everything that arrives in the mail, especially when you’re renovating your home. These required notices often look like junk, but they may be the only warning you get.
Board-certified real estate lawyer Gary Singer writes about industry legal matters and the housing market. To ask him a question, email him at [email protected], or go to SunSentinel.com/askpro.
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