She Thought She Was Protecting Her Home From Hurricanes. Instead, She Ended Up Facing a Lien

Adria Bernstein, a homeowner in Pinellas County, FL, claims she paid a local hurricane protection company almost $12,000 to install hurricane-grade windows and doors that were never delivered or installed. 

Bernstein says months went by with minimal communication and no proof the materials for her project were ever ordered, putting her at risk of losing a state grant that required the work to be completed within a year.

When Bernstein asked for a refund, the contractor threatened to charge her a steep penalty and file a lien on her home, a move that is a commonly unheard of by homeowners but happens all too often.

It's called a contractor lien or mechanic's lien, and it's just one of several ways a lien may be placed on your property that you might not expect or, worse, are not prepared for.

Why a property lien is a big deal

A property lien is a legal claim that attaches to your house because of an unpaid debt. “It can block you from selling, refinancing, or transferring ownership, and even follow the property for years if not properly resolved,” says Stephen Lockard, litigation attorney at J&Y Law in Los Angeles.

Lockard explains that while Bernstein’s situation is frustrating, it happens more than often than homeowners realize. “The homeowner tries to do the right thing, hires a contractor, and ends up at risk of losing control over their own property,” he explains.

A contractor's lien, or mechanic's lien, is a legal claim placed on a property to secure payment for unpaid construction labor or materials, allowing contractors, suppliers, architects, and engineers to force payment or foreclosure. In the case of Bernstein, the contractor sent her an email saying she's responsible for 90 percent of the contract amount and if she refuses installation due to the delays, they'll put a lien on her property for the rest of the money owed to them for the job, despite it not being completed.

Even if a lien is filed over a relatively small amount of money, releasing it can be a time-consuming and costly endeavor. If a homeowner doesn’t take action to dispute the lien quickly, foreclosure may follow. 

“Even on a million-dollar home where the outstanding lien is only for $3,000, that lien would cloud the title on all property, effectively making all the real estate at issue as immobile as Fort Knox,” says Shane Lucado, attorney and founder of InPerSuit, Inc. in Atlanta.

Surprising ways a lien can be put on your home

Here are five other less-obvious ways liens can that can be filed on your home:

Subcontractor liens

Say you have a contract with a roofer. You pay the roofer, but unbeknownst to you, the roofer stiffed his crew. “In this case, the crew can file a lien against you,” says Lucado.

HOA fines

Imagine you and your HOA get into a long-running feud, which leads to you owing several fines. After several late fees, these fines snowball to several thousand dollars. “The association may then place a lien on your property without missing a beat,” explains Lucado.

Child support liens

If someone on your title has an open child support case, Lucado says your state may place a lien on the property immediately—to the extent that child support is owed.

City code violations

Say your lawn is overgrown or a fence needs to be repaired. If you receive a letter, fail to make good, and accumulate $500 or more in fees, the city can magically place a lien for whatever violations they can find. 

Fraud

Unscrupulous vendors can file liens against a property that are bogus, erroneous, or intentionally misfiled. “There are always exceptions, but my professional experience says that it most often involves fraud,” says Lucado.

Expert advice to avoid liens

The good news is that being proactive and following these tips can significantly reduce the risk of facing a lien.

Do your research and ask for lien releases

When you shop for a contractor, ask them directly about lien releases. “It’s your right to request lien releases when making progress payments,” says Gregg Cantor, president and CEO at Murray Lampert Design, Build, Remodel in San Diego. These documents will protect you from being financially liable for work you’ve already paid for. 

Ask for proof of payment

If you do make a large deposit for a product order like Bernstein, don’t hesitate to demand proof of payment right off the bat. That way you have the evidence you need in case things don’t go as planned.

Inspect lien records

Inspect lien records at the county level at least four times a year. “This will cost you no money and about five minutes of your time but allow you to catch issues early on before they escalate and become more complicated to resolve,” explains Lucado.

Seek legal help

If you’re having problems with a contractor or are dealing with any lien-related issue that you simply don’t understand, don’t wait. Consult an attorney as soon as possible to discuss how you can protect yourself.

The moral of the story is to treat your home like a chessboard—not a blank check. 

“Everybody wants a piece and if you’re not watching your game, someone’s about to come and take it. Believe it or not, half the battle in avoiding liens is just knowing where to look for them,” explains Lucado.