It doesn’t make sense to me, either? What sort of legal document of the debt does the manufacturer of the roofing or the cabinet subcontractor have to establish the homeowner owes it? I mean if I buy gas from a gas station, and drive away, and it turns out the gas station didn’t pay their fuel supplier, the fuel supplier can’t go slap a lien on my car. I have a receipt from the gas station showing full payment (or, more realistically, an electronic record) and that’s that.
This is one of those stories that doesn’t add up. Funny how they always happen to “a guy I know” and never anyone you can question directly.
It seriously doesn’t - just challenge the lien in court? For something like a roofing job, that’s 10k+. No way anyone would just fold and pay that twice. What sort of signed agreement would the shingle vendor have with the homeowner? Conversely, the homeowner will have a receipt that shows they paid for the roof.
We had one placed on our property in Ontario, and also found out when we renewed our mortgage agreement.
As with other areas, in Ontario they don’t have to provide proof the lien is valid when they file it, but if / when it’s challenged, they must provide proof within 30 days(?) that the it’s legitimate. I.e.: the burden of proof is on them to show they’re still owed money, not on you to to show you don’t. If they can’t / don’t do it within the specified time, the lien is dismissed and no record of it remains. (At least this was how it worked 20 years ago).
In our case the filer, who we’d never heard of, didn’t respond to the request, so it was immediately dismissed. They’d either gone out of business or it was BS in the first place.
As several posts have noted, if you have work done and you pay your contractor but they stiff their employees, you’re on the hook to pay again. This was a huge eye-opener for me. I had no idea this was the case. Our lawyer friend who walked me through the process told me to always get proof that a contractor has paid all their employees & suppliers prior to giving them the final payment. Less important for big contractors who’ve been around for a while, but critical for small ones.
I request a single page that says on the top “This is to verify that the contractor has paid me all money owed for the work done at GMan’s House, 123 Main Street, date " and signed below by each employee who worked at my house.” The contractor also signs saying “I have paid all employees and suppliers” who were involved. It won’t mean anything if they go out of business in the future, but it will be some proof the lien filer was paid or if the company forges the signatures, the forger could personally be charged with criminal fraud even if they’re out of business.
I’m not sure if you’re agreeing with me that they don’t seem fair or suggesting that this isn’t how they work.
As I mentioned earlier, I personally know someone that this happened to. It wasn’t ‘a guy I know’, it was my grandparents.
Here’s a link to the example I mentioned earlier about the home improvement store.
And here’s a quote from the wiki page on liens, bolding mine.
"Unlike other security interests,** in most states, mechanic’s liens are given to contractors and material suppliers who may or may not have a direct contractual agreement with the owner of the land**. In fact, this is often the norm because in most cases, the owner of the land contracts only with a general contractor (often called a “prime contractor”). The general contractor, in turn, hires subcontractors (“subs”) and material suppliers (“suppliers”) to perform the work. These subs and suppliers are entitled to liens on the owner’s property to secure their payment from the general contractor. "
Reading this thread, I’m amazed there’s no automatic notification that a lien has been imposed. A lien is literally being filed against a fixed address, but no letter is sent to that address informing the residents of the lien? I understand that there may be renters at the property, but it seems like such an easy step for the court to send a letter. I mean, if they can do it for speeding tickets originating from speed cameras, why aren’t they doing it for liens?
The wiki on liens says a similar thing exists in Spain, but the Spanish system only allows one to file something similar in court as part of procedures against someone who has not paid in a reasonable amount of time; it is not something that can be put in place before the debt is defaulted. Also, by the time a defaulted debt other than a mortgage affects real estate, all other venues of payment have been exhausted. Please correct if I’m misunderstanding, but the American/Canadian concept allows the lien to be placed as soon as the debt is incurred, and even against someone who isn’t the person incurring the debt: is this understanding correct?
I am amazed someone can put a lien on a place for an unrelated matter. Contractors I sort of get (except for the paying twice deal). And things like putting up bail with your house as collateral (but at least you are agreeing to this in a contract).
One thing I wonder about is that they know perfectly well and are hoping to get paid during “crunch time” when selling the house. You are about to close on your house, the lawyer says there’s a lien, the jerks who added it on have 30 days to “prove it”, but closing is closer than that: maybe you decide to pay the few hundred bucks since that is cheaper than extra legal fees, delaying the sale, etc.
With a scattergun approach they are going to hit a place about to be sold here and there. As long as there is no real penalty or limit on this, it will pay off.
Because of this thread, I decided to check online if there’s a lien on my house. Turns out the county made a deal with a commercial company for online access to this. I would have to pay to see if there’s a lien. Way to serve the taxpayers there.
OMG - you HAD to remind me of the days of digging through the paper Torrens volumes at the Chicago clerk’s office! :eek: Next you’ll try to convince me there used to be these BOOKS called Shepard’s… :dubious:
Sure, legal counsel could be useful - or even necessary. But as a first step, I’d suggest talking w/ the folk at the clerk’s office. Even as a lawyer, I’ve found the folk at the various gov’t offices to be a wealth of info and assistance. Just be polite, and make sure you aren’t there at their busiest times. More often than not, you’ll find that public servants are happy to actually serve the public!
Like GMANCANADA said, the flip side of their being easy to obtain, may be that they are relatively easy to remove.
Be glad your finance companies consider it a mistake and don’t feel it was intentional or nefarious.
I recall seeing features on 20/20 and 60 Minutes about the Sovereign Citizens
[ul]
[li]Filing false liens on celebrities and government officials [/li][li]Acquiring real bank loans using those liens as collateral [/li][li]Holding seminars on how to do it[/li][/ul]
That was thirty-some-odd years ago and occasionally I still see news articles about these guys pulling the same $#!+ and/or getting some really bad press when the media shows up to start asking sticky questions and/or getting run out of town when they try to hold a seminar.
Apparently they still tend to like recruiting business owners in the service sector – plumbers and roofers and electricians and such. They can show a contracting license and some back-dated fake paperwork to administrative clerks who don’t know any better – “Yeah, I put a new floor in Judge Alito’s summer house a few months ago and he hasn’t paid me yet…” And the real scam seemed to be more about raking in the bucks from the seminars, which they apparently used to pay a few monthlies on the loans before moving on to another town.
I would say it’s more than a registry system. It’s a title system. The records kept by the government are the proof of title, not the title deeds kept by the land-owner.
It’s WYSIWYG: whoever is shown on the title is the owner. It provides security of title that a mere land registry system cannot do, since an entry in a registry system is simply presumptive proof of title. Registered title can be challenged, leading to uncertainty on title.
The other key aspect of Torrens is that if an instrument like a mortgage, judgment writ or lien is not registered on title, anyone who purchases the property takes it free of those claims. WYSIWYG. If no mortgage is registered, it doesn’t bind the title.
Now take those two principles and modernise them with an on-line system that anyone with internet access can search. It’s a great system that provides security of title and full knowledge to anyone interested in buying a particular parcel of land.
It’s also Province-wide: I can do a title search on any plot of land in the province, from my office or home. I don’t have to trudge down to the local registry office, or hire an agency in some other city to check the title of a plot of land in that city I’m interested in
And then I have a complete understanding of who owns the parcel of land and who has legal claims against that parcel. I don’t have to worry about some unknown claim popping up: if it’s not on title, it doesn’t bind me if I buy that parcel.
And, in my province, the computer system automatically sends out a real physical letter to the owner’s address of record, anytime someone registers something against the title. So in the case raised by the OP, Mrs Sticks Ate would have got a notice in the post within a week that someone had registered an interest. No hidden surprises that linger unknown for years until she tries to re-fi or sell.
I can’t deny that this appears to be legal. But it’s complete bullshit and sounds like a typical poorly thought out and basically corrupt state law. The law should clearly state that these liens only can be levied by the primary contractor or business entity. Otherwise it sounds like this law technically means that I could take my car to a mechanic’s shop, receive an estimate from that shop, later come by, receive a written bill, pay that bill - and I’m still exposed to possible future liens if a mechanic or auto parts supplier, unbeknownst to me, is a subcontracting entity working on my car and was not paid by the shop their cut of the money I gave them.
Total bullshit. Unless it clearly stated in a separate signed agreement with the subcontractor, and I have been presented with a bill by that subcontractor, these liens should be simply unlawful.
It is very consumer unfriendly but it is supposed to be business friendly. Apparently the argument is that it supports small businesses. A roofer doesn’t necessarily have to come up with the $ for supplies up front, the supplier has recourse if the roofer can’t pay and therefor is willing to front him the supplies. So, think of almost all state legislators in the US-are they more business friendly or consumer friendly? That is the reason I was given back when this happened to me. OTOH, in my state there is a time limit on filing liens and the supplier missed the window. As soon as the business manager heard me say that on the phone she sighed and hung up. Obviously she knew she had missed the window, but was hoping I wouldn’t realize it. As others have said, get from your contractor receipts for all the major supplies marked paid before you settle up.
