How to Hire and work With a Contractor
Sweat it... Hire It! is a fun, easy-to understand guide to hiring professionals to do your
home repairs and improvements. It caters to the BIY (buy-it-yourself) consumer, who prefers
to hire work done rather than do their own home projects-the fastest growing trend in home
improvement. All types of residential maintenance and improvement specialists are included
in this book, ranging from the neighborhood lawn care person to construction general contractors
specializing in major remodeling and renovation. Readers will learn how to find good, dependable
resources, how to check references and work histories, how to negotiate fees and contracts,
how to communicate with professionals and supervise their work, and what to do when things
don't go exactly as expected.
The book includes sample contracts and schedules that readers can use to create contractual
agreements, and an extensive list of resources to help consumers find and manage good home
repair and improvement specialists.
Mechanics Liens: Avoiding a Nasty Surprise
The mechanics lien allows a contractor to place a legal hold on your home if you fail
to pay him. Fair enough, right? But get this: Even if you pay the contractor the agreed amount,
and instead of paying his subcontractors or materials suppliers he takes the money to the horse
track, any of those subs or suppliers can slap a lien on you. Unfair? Yes, but true (feel free
to write your congressperson at any time).
A lien is almost like having a second - but evil - mortgage placed on your home. If you
fail to pay a lien claimant, or if you can't afford to do so, it's possible that your home
can be sold in foreclosure to pay off the lien. In many cases, homeowners end up biting the
bullet and paying off claimants, which means they pay twice for the same work or products.
Once a lien is filed against your property it stays on your record with the county; even if
the lien turns out to be invalid (each state has its own requirements and time limits for filing
liens), its presence can make it difficult to qualify for loans or sell your property. You
may have to hire a lawyer to help you get the lien removed from your record.
So, how do you protect yourself from this hideously misguided law? Start by hiring a
contractor with a proven track record and no history of litigation. Ask your contractor for
a complete list of all subcontractors who will work on your job (including confirmation of
their licenses, as required) and all suppliers he will use. This allows you to identify all
potential lien claimants, which will help you keep track of who has been paid at each stage
of the project. Before work gets underway, file a Notice of Commencement with your county court
or county recorder's office. This gets your project on the books and may be a legal requirement
for processing any lien litigation.
In many states, subcontractors and materials suppliers are required to send you a Notice
to Owner, which essentially states that they will be supplying labor or materials for your
project and that they are potential lien claimants. If your state does not require a Notice
to Owner, it's up to you to keep track of all potential claimants.
Depending on your state's laws, you may be able to use one of the following means to
protect your property against liens:
1. Joint checks. You can include the names of both your contractor and the appropriate
sub or supplier on payment checks. Both parties have to endorse the check to get the dough,
so your contractor can't just take the money and run.
2. Lien release clause. You can stipulate in your job contract that each sub and supplier
must sign a release with each payment, In the typical process, the lien claimant first signs
a contract (or partial) release form before he is paid. After he is paid, the claimant signs
an unconditional (or final) release of lien. You can withhold any subsequent payments until
you receive the unconditional release. Before making the final job payment to your contractor,
be sure you have ab unconditional release form from each lien claimant. You also can state
in your contract that the contractor is responsible for obtaining - and delivering to you
- all release forms.