Someone Placed a Lien on my Property; What Should I do?
- Carefully take a look at the lien; there may be errors
- Pay any lienor directly in exchange for a lien release
- Bond off the lien to remove the lien from the property
First determine if you owe this person money? Most times, the lien is placed by someone with whom you either have a direct contract or someone further down the chain. This person may be a subcontractor or supplier that wasn’t paid or has a billing dispute. As a result, a lien may be proper. If so, the best way to resolve it is to exchange payment directly with the lienor, if you agree, in exchange for a lien release. You can see different types of forms of releases on our website which you can use in exchange for payment.
What to do when you dispute that the amount is owed and you want to argue about the propriety of the lien on your property
Take a look at the lien and deconstruct it to find errors in the lien. If you find an error, you can go back to the person that placed the lien and tell them that there is a mistake in the lien. It may therefore be considered fraudulent and they need to remove it. Check the lien for the following errors.
Does the lien have the warning?
This is a mandatory component of the lien. It needs to have a warning at the top of the document. Sometimes, the warning will appear at the top center of the document. Other times you will see it in a little box in a corner. If there is no warning at all in the document, it may be unenforceable.
Was the lien recorded more than 90 days after the last work date?
Once you determine that it has the warning, you need to determine if the person that recorded the lien is in direct contract privity with you. If so, what do they suggest is their last date of work on the project? If they are in direct contract with you, they don’t need to serve a Notice to Owner; all they need is to record the lien within 90 days of their last work on the job. You will find when they did their first work and when they did their last work towards the bottom of the lien. Compare the last work date to the recording date at the top of the document and see whether or not the time difference from their last work that they allege and the date of recording is more or less than 90 calendar days, (including every weekend except the 90th day, which rolls to the next business day). If the lien was recorded more than 90 days from the last work date, then that lien is potentially invalid and fraudulent.
Was the Notice to Owner served by a subcontractor that you don’t have a contract with after 45 days of their first work on the job?
If the lien is by someone further down the chain and someone with whom you don’t have a contract, you need to measure the Notice to Owner deadlines against their first work. Anyone that doesn’t have a direct contract with you as the owner needs to serve a Notice to Owner within 45 days of their first work on the job. The date of the first work is typically going to be in this bottom paragraph of the lien. Check the first date of work against their notice to owner timeframe, which is also listed at the bottom paragraph, and make sure it is more or less than 45 calendar days. The last day of the 45-day period needs to land on a work day, not a weekend or legal holiday. If it is more than 45 days, this lien is probably invalid and potentially fraudulent. You can write back to the party that recorded the lien suggesting they remove it from the property.
If you’ve tried these steps but these issues don’t present themselves in the lien and you still want to fight it, you can bond the lien off. This means you can go to the clerk’s office with either a surety bond or a cashier’s check, roughly a hundred and fifty percent of the amount of the lien, and the Clerk will remove the lien from your property in exchange for this cash or surety bond. Now it’s off your property, but it doesn’t mean that you are not liable. The lienor can come after you on the surety bond or the cash being held by the clerk in order to try to get paid. So, it doesn’t solve the problem. But if you need your property free and clear of liens, maybe you’re refinancing, maybe you’re selling, then you have done what you need to do – clear your property from the lien.
Finally, consider shortening the time that you give the other side to file a lawsuit to foreclose on the lien. Normally they have one year from the recording date of the claim of lien. But you can shorten that in two ways. You can go to the clerk’s office and record a notice of contest of lien. That shortens that period down to 60 days from the date of the notice of contest. If that is not fast enough, you can hire a lawyer and serve a 20-day summons. This reduces it down to 20 days from the day they are served. Both of these will reduce the time that the lienor has to file suit. Many lienors record liens first and ask questions later. So, if you force them to file a lawsuit on their lien, they may choose not to do so because they don’t want to spend the money on a lawyer.