Inspired by this thread.
Can some knowledgeable Doper explain to me how liens work in America?
How is it that in America you can just impose liens? How come you don’t need to advise the target?
IME (only dealt with it once), I was advised, and signed paperwork, about the lien before the job even started. The lien was never filed (though I still requested, and received, a lien release upon making the final payment), but all they had to do was file it if they needed to.
Sicks Ate’s situation is different. It’s like asking how you could get sued for something you’re not involved in when, in reality, you just have the same name as someone else and a mistake was made somewhere along the line (or a lawyer is using the shotgun method in hopes that someone will write a check).
As I mentioned in the other thread, the big problem, in my mind, is how they [can] work. Often times with construction [mechanic’s] liens, it’s not the people doing the work…the contractor you directly owe money to, that places the lien on your property. It’s the person that supplies the materials…the person that gets paid by the person you pay.
For example, if you call your local roofing company and have them install a new roof, you may have a lien on your house until you make the final payment. However, the lien may not be by Jim’s Local Roofing, but rather the person who sold Jim’s Local Roofing the supplies they used. Based on another random fact I know, I’m willing to bet the supplier owns the materials until they’re paid for.
It’s a system that I think needs some tweaking to make it fair. There’s far too many horror stories of people having to pay for things they don’t owe money for just to get a lien released.
I worked for a company that leased equipment to contractors and frequently had to file liens against the property owners and/or the general contractor and numerous other entities and their “assigns”.
Now this was commercial construction and mostly long-term projects, so there was rarely a problem. If we didn’t get prompt payment we would file a lien. That usually got the GC/owner to lean(heh) on the subcontractor and withhold their payment until all obligations were met. This is a necessary pro-active step, as usually it was only a matter of slow payment and our customer was reliable, but you never know if they’re having financial problems. To file the lien I had to show that a certified, return-receipt demand letter was sent to all parties and provide copies of invoices and contracts. It is a routine practice. Most contracts include language that spells out the GC’s(or owner’s) in-house process to make it easier for all parties. And, without exception, our customers had us sign a lien release for the specific amounts/time periods covered with each check they sent for payment.
Customers who were known risks were usually required to execute a joint check agreement to avoid the problem.
When I had a new roof put on my house I had the roofer sign a lien release when I made the payment. Sick’s Ate’s issue is different in that it is obviously an unfortunate mistake, but no court in the world would enforce that mistake.
My guess is that what Sicks Ate was facing was a judgment lien. I’m speculating on a lot of things here but the process could have happened something like this:
- Person with SicksAte’s wife’s approximate name (“Not Wife”) trashes her apartment and leaves without providing a forwarding address.
- Property management company sues NotWife. NotWife is served with the suit under the state’s rules for service of process. This is generally personal service (i.e., notice of the suit is delivered to NotWife in person), or, if Not Wife is avoiding service, by substituted service (i.e., notice posted at her last known address and contemporaneously mailed to her).
- Property management company wins a judgment against Not Wife. (In America, this is likely a default judgment since most tenants abandoning property don’t present a defense in the cases against them. It’s possible that if substituted service or “sewer service” were used that Not Wife didn’t even know she was being sued.)
- Property management company is unable to collect on the judgment against Not Wife and so moves for a judgment lien.
- SicksAte’s property is identified as belonging to NotWife because ActualWife has a confusingly similar name. The details might vary from state to state. Some states apparently automatically apply a judgment lien against a defendant’s real property within the county, so perhaps someone at the court made the assumption that NotWife and ActualWife were the same person. More likely, the property management company’s attorneys made the mistake in their motion and identified SickAte’s property as belonging to NotWife. There is generally no notice of a lien because the defendant was served notice of the suit and is responsible for everything that happens in court thereafter.
- SicksAte learns of the lien when he goes to refinance.