Are You Hiring a Contractor? Beware of Mechanic's Liens

If you’re having work done on your home, you’re probably dealing with some kind of contractor. But what many homeowners don’t realize about how contractors work could end up costing them.

A Simple Job Gone Wrong

Michelle Young had a simple, straightforward home improvement project. She wanted to install a cement patio beneath her deck. So she did what many people do and turned to the internet. She used Thumbtack to hire a contractor.

The contractor came to Michelle’s home and quoted a price of $2,200 for the job. Michelle agreed, the contractors installed the patio, and she paid them. She assumed the project was completed and she could go on enjoying her new patio. But she was in for a surprise.

About three months later, Michelle got a letter from a cement supplier saying she owed them over a thousand dollars. Even more concerning, the cement supplier had put a lien on Michelle’s home, pending payment of the materials fee.

What Went Wrong Here?

Michelle is in a tough position here, because the law is mostly on the side of the cement supplier.

When a contractor works, they often hire other craftspeople to do some or even all of the work. They also purchase materials. But when they make those financial agreements, they don’t assume the responsibility to pay. Instead, the homeowner is responsible to pay all the parties who supply materials and labor.

Normally, when a homeowner pays a general contractor, the contractor doles out the money to the suppliers and workes, and keeps the remainder as their profit. But if a contractor doesn’t disperse the funds, the one on the hook is the homeowner.

Craftspeople and suppliers can request payment from the homeowner directly, since the homeowner is seen as the one who hired them or purchased the materials. And if the homeowner fails to pay, craftspeople and suppliers can put a lien on the home until they are paid.

How to Protect Yourself

Fortunately, protecting yourself from these liens is simple. Before you pay your general contractor, make sure that you have proof that all the suppliers and craftspeople were paid. Get copies of all the receipts. This way, you can be sure that everyone was paid and the money you give the contractor is to reimburse their costs—i.e., paying for materials and labor—plus some profit.

Of course, if your contractor is honest, they won’t stiff their suppliers and leave you in the lurch. So finding a reliable contractor is another way to reduce your risk of mechanic’s liens. You can find all sorts of reliable, investigated, and certified contractors at 

TrustDALE.com

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