To lien or not to lien

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magictolight.com

magictolight.com

Senior Member
Location
Indianola, Iowa
So I have this customer who we have a signed contract with. We complete the first half of the work, pull our permit with the city, (not in that order):grin: and invoice for the work as cited in our contract. Now we are 80 days out from that invoice still waiting for payment. We set this up to receive payment after the first 1/2 was done, and the second 1/2 of the project would be scheduled several months down the road. Well, now I have an owner who has been cordial so far, but still owes us money. In Iowa we have 90 days to put a lien on a property. Do I call him and let him know we have to protect our investment in his property or do we just let this go so as to protect this relationship?
 
M

mpoulton

Senior Member
Location
Phoenix, AZ, USA
magictolight.com said:
So I have this customer who we have a signed contract with. We complete the first half of the work, pull our permit with the city, (not in that order):grin: and invoice for the work as cited in our contract. Now we are 80 days out from that invoice still waiting for payment. We set this up to receive payment after the first 1/2 was done, and the second 1/2 of the project would be scheduled several months down the road. Well, now I have an owner who has been cordial so far, but still owes us money. In Iowa we have 90 days to put a lien on a property. Do I call him and let him know we have to protect our investment in his property or do we just let this go so as to protect this relationship?
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You better lien it. If not, consider it a freebie.
 
K

kevinkk

Member
Location
CA
Ask the client to sign a payment plan for the amount due, even if he does not pay you have the client?s signature which basically is stating that he agrees that amount is owed to you, this will help you when you go to court to perfect your lien. Not legal advice just my personal thoughts
 
Rick Christopherson

Rick Christopherson

Senior Member
Politely tell the client that you need to file the lien due to legal time requirements, but it is also just as easy to removed it. It will be removed before they need to close on their refinance, but must be done as a protection.

Tell them, no harm, no foul.
 
e57

e57

Senior Member
Location
San Francisco, CA
Lien laws differ place to place - read up on yours...

Here even the supply houses could lein you, and the property the material went to... In any case - these days - it would be safer than sorry to perfect your lien perfecting skills... Some people see this as a threat and it should be handled delicately, but not avoided. But guarantee that if this place has a title held by a bank - you'll be paid likety split if you do lien it. It seems nothing sets a bank on fire like that - they usually come down like a ton of hot bricks on the owner.
 
Sierrasparky

Sierrasparky

Senior Member
Location
USA
Occupation
Electrician ,contractor
From the been there done that with the lean issue. I personally like the promisory note or extension of credit. Some states this may even extend the lein time. Today i would consider long and hard before I would lein. Most states require you to file suit to perfect your lein. If the customer complains about your work this could taint your claim. If the customer looses out on a low intrest rate because you held up a loan or something. And you inturn could not afford to do the Legal two step to win a judgement you could be in trouble.

Coments by a contractor not a lawyer.
 
mcclary's electrical

mcclary's electrical

Senior Member
Location
VA
another "been there, done that",,,,,I found myself in a sticky situation because of that a couple years back. I ruffed in an addition/ garage. In addition to the addition,,,,,there was a kitchen remodel and complete device relpacement in the rest of the house. This was a second home to the owner. 90 days After the rough-in,,,I still haven't been paid,,,,,because they have ran out of money. So,,,,they go to refinance,,,,,,but i've already got a lein on the house,,,,,,,secondly,,,the bank shows up for the refinance inspection,,,,and they won't give any money because most fixtures have been removed,,,,most switches and receptacles removed,,,,,so they won't give money because of the state of the house,,,,but I'm not going back until I get some money,,,,,,it was a big standoff,,,,,,,,i eventually caved,,,installed porcelein lampholders in every room,,,,,put switches and receptacles back to bring the original portion back to it's original state,,,,,it was a mess and I still lost money on the job. so be careful,,,,there was probably a better way out of my situation,,,,,but I was fed up with this particular builder,,,,,live and learn
 
ceb58

ceb58

Senior Member
Location
Raeford, NC
magictolight.com said:
Do I call him and let him know we have to protect our investment in his property or do we just let this go so as to protect this relationship?
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Relationship? What relationship? You work for free for his undying thanks? You must do what you need to do to protect your time and investment in material.
 
V

VoltzElectric

Member
Location
Hudsonville Michigan
A relationship is a two way street. If he isnt owning up to his end of the bargin, then he isnt honoring your relationship. He will probably find that it will cost him more for someone to come in and take over on a job thats 1/2 way done. I would bet that if you approach it with the right attitude and expain your situation, and you need to pay your vendors and people and protect your company, he will be understanding.
 
J

Jps1006

Member
Location
Northern IL
If you think you want to lien, I say do it. How you do it is where the finesse is. I would minimize the idea and let him know it is strictly a formality. It happens all the time and there is no reason for concern, it can be easily removed. Just treat the idea of you liening him as he has of him paying you. It?s really no big deal.

Or try the 3rd party if you have one. ?my partner is insisting on this?. Or pick anyone, your lawyer, your wife, your accountant, your dad.

Good luck.
 
Rick Christopherson

Rick Christopherson

Senior Member
mcclary's electrical said:
...the bank shows up for the refinance inspection,,,,and they won't give any money because most fixtures have been removed,,,,most switches and receptacles removed,,,,,so they won't give money because of the state of the house,,,,but I'm not going back until I get some money,,,,,,it was a big standoff,,,,,,,,i eventually caved,,,installed porcelein lampholders in every room,,,,,put switches and receptacles back to bring the original portion back to it's original state,,,,,it was a mess and I still lost money on the job. so be careful,,,,there was probably a better way out of my situation,,,,,but I was fed up with this particular builder,,,,,live and learn
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You're damned lucky, because if you had pulled this on me, as a home owner, I would be the proud new owner of McClary's Electrical!!!

What you did was file a fraudulent lien, by filing a lien against property and then to go back and remove the very materials that were covered by that lien. You are lucky that the homeowner wasn't lawyered-up.
 
Sierrasparky

Sierrasparky

Senior Member
Location
USA
Occupation
Electrician ,contractor
JWCELECTRIC said:
Request full payment to finish project, Once paid in full wait the same amout of time it took owner to pay you to start finish on the last half of work.
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That might not be a wise idea. check your state rules. In CA you cannot take more mony than work material Period.
 
e57

e57

Senior Member
Location
San Francisco, CA
Sierrasparky said:
That might not be a wise idea. check your state rules. In CA you cannot take more mony than work material Period.
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YOU CAN - just not advisable for a variety of reasons. As far as I know nothing in the CA B&P excludes you from it, if you know of something - point me to it - I wanna know. (Working for a financed GC that is... I know about the HO and the $1000 down thing.)
 
A

AVD001

Member
You can go back and get one circuit hot for the guy and the 90 days start from that point again. As long as you have some way to back up the fact that you did some work on the project your 90 days start from that point.
 
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