Software
Houzz Logo Print
hzdeleted_9754417

Mechanic Lien Question

10 years ago
last modified: 10 years ago

Helping a friend. So, I don't have a lot of the specifics. For anyone who might know the answer - If a contractor fails to pay a subcontractor, who then moves to place a mechanics lien on the property, what does the following language in d) in this statute mean?

d) Rights and liability of owner.
The owner of the real property shall not become liable for a greater
amount than the owner has contracted to pay the original contractor,
except for any payments to the contractor made:

(1)
Prior to the expiration of the three-month period for filing lien
claims, if no warning statement is required by K.S.A. 60-1103a, and
amendments thereto; or (2) subsequent to the date the
owner received the warning statement, if a warning statement is
required by K.S.A. 60-1103a, and amendments thereto.

The
owner may discharge any lien filed under this section which the
contractor fails to discharge and credit such payment against the amount
due the contractor.

Comments (9)

  • 10 years ago

    You need to have your friend talk to a lawyer.

  • PRO
    10 years ago

    Everyone seems to want to blame the sub or supplier in these situations. It isn't his fault the guy you paid didn't pay him. You have an obligation to know the speed limit whether it's posted or not. You have an obligation to get signed lien waivers from subs and suppliers too. Ignorance of the law is no excuse in either case.

  • 10 years ago

    Blame the sub? For the lien? I assume exactly what you said: the GC didn't pay the sub.

    Washington State Bar's model contract wording:

    2.7 Lien Release. Owner shall not be required to make any payment to Contractor unless and until Contractor provides Owner with an unconditional waiver and lien release form signed by Contractor and by each subcontractor and supplier who is claiming Two Thousand Five Hundred Dollars ($2,500.00) or more in payment ...

    I've wondered about this: does the GC usually pay out of pocket and then get reimbursed? That can be a big float. But otherwise, there's a chicken-and-egg: how does the GC get a lien release without paying the sub?

  • 10 years ago

    I've wondered about this: does the GC usually pay out of pocket and then
    get reimbursed? That can be a big float. But otherwise, there's a
    chicken-and-egg: how does the GC get a lien release without paying the
    sub?


    This is business 101. If the GC contracts for a sub but cannot manage his money well enough to pay, whether before or after he gets paid by the property owner, then it's a sign of a fly-by-night, paycheck-to-paycheck GC who shouldn;t be in business.. A lien isn't filed if the bill is 10 days late. And if the property owner isn't paying, the GC should file the lien.

  • 10 years ago

    It's a cash flow issue, right? I mean, if you're a big concern and have a big credit line, no issues. But what about a small GC? Do they routinely front 10K$? 100K$?

    The question isn't the timing of the lien: it's the timing of the lien release. Just because a sub hasn't signed a lien release doesn't mean they have to file a lien on the due date. But once a sub has signed the release, that ship has sailed: if they didn't have the cash in hand at the signing, they've given up a major point of the release.

    I'm just curious whether people actually do what WA is recommending and/or how much float a GC normally fronts.

  • 10 years ago

    Sorry to cause a stir. I thought it was a simple question. Guy kept aside 20%, so not a big deal. But, he was reading the statute and wondered what it meant and I didn't know either. I think it could mean 1 of 2 things. 1, Sub can only put a lien on for the difference between what the home owner paid the debtor contractor and what was held back. Or, 2, regardless of what the home owner already pain the contractor, sub can only put a lien on for the amount of the total contract between the home owner and contractor. I think it is #2. He thinks it is #1.

    So sorry if this question sounded like blaming anyone. Just a question.

  • 10 years ago

    It means that he'd need to make sure all future disbursements go to pay the subs and that he get release at each step, when a GC starts to screw up there is no reason to believe it won't continue. He needs a lawyer....

  • 10 years ago

    ...and possibly a new GC

Sponsored
Bella Casa LLC
Average rating: 5 out of 5 stars17 Reviews
The Leading Interior Design Studio in Franklin County