What To Do When You Get A Mechanic’s Lien

[This blog post is not “legal advice” – readers should consult a lawyer for all legal matters. Instead, this blog posts reflects what Dan and I, as homeowners, have learned by going through the process of having liens put on our homes and being sued by contractors.]

Our townhouse got its first (and hopefully only) mechanics lien last month. Our contractor decided to not have his stair subcontractor (and “friend” – Adam Wedrychoski of ABC Stairs Builders Corp – aka “Traditional Stairs Corp”) complete the stairs because he was too expensive and the budgets had gotten tight. Adam got disgruntled and is now going after us for $9,600.

We’ve gone through this before when the contractor for our apartment remodel (Bill Angelov of ABS Construction) went after us a few years ago (a blog post is pending on that one). We were amused that Adam Wedrychoski / ABC Stairs Builders even used the same lien service Bill Angelov / ABS Construction had used – Speedy Lien. Unfortunately the New York court system, and companies like Speedy Lien, make it so disgruntled workmen/contractors/subcontractors can put liens on your property without any proof that they have a legitimate claim.

This isn’t a horrible thing… Liens are good in that they alert purchasers of a property that there may be claims on a property. They also insure that people who add value to a property are compensated when the owner sells the property. But ultimately, they’re just a first step and the workman / contractor / sub-contractor needs to prove their claim in court.

In this case Adam Wedrychoski / Traditional Stairs Corp has no basis for putting a lien on our property. He has no contract with us, nor was there an implied contract with us (e.g. we never paid him directly). He was a subcontractor working for our contractor. If he had talked to a lawyer, he would know that all he is legally entitled to do is sue our contractor. We do have a contract with our contractor, but every time he gets a payment from us he signs a lien waiver stating that all of his subcontractors have been fully paid.

The amount of the lien doesn’t even make sense – which seems typical of liens by Speedy Lien… He took the total amount he would have been paid if he had completed the job, subtracted what he had been paid, and then put a lien on us for the difference. So he’s essentially asking for money for work he didn’t do. Thankfully our court system doesn’t think the same way Adam does.

When we contacted Wells Fargo (the lending bank for our mortgage), what they said worried us – they stop all payments of any kind if there is a lien in place. They wanted us to “settle” with Adam Wedrychoski / ABC Stairs Builders Corp and they erroneously told us that they don’t accept bonds.

Thing is, bonding the lien is the correct way to deal with the situation. It’s actually sort of cool how bonds work… You contact a surety agent (ours is Elmer Hyde Agency), and give them 110% of the lien amount plus a few hundred in fees. They bond the lien, and you file that paperwork along with some other affidavits with a clerk at the court building (harder than it sounds) and the lien is discharged. Once the lien is discharged, it no longer exists. That means your title is clean and your bank will be happy.

If the workman/contractor/subcontractor sues you and the court finds in his/her favor, the bond is used to pay the judgement and you get whatever is left over. Liens are for one year and they can be renewed once – so they can only exist for two years total. If the workman/contractor/subcontractor doesn’t sue you during that time, then you get the bond amount back with interest. However, the workman/contractor/subcontractor can sue you for up to 6 years (in NY), but after the bond expires, s/he just has to hope that you can still pay.

While it may seem odd to welcome a lawsuit, we’ve been through the process before and our attitude is “bring it on”. Adam Wedrychoski / Traditional Stairs Corp is in an impossibly difficult position. Because he is a corporation he is not allowed to show up in court without a lawyer. Because lawyers typically take a percentage of the settlement, they won’t take the case on unless they think they’ll get paid. They would typically get 1/3rd – and 1/3rd of $9,600 ($3,200) isn’t enough for them to bother with the case. And that assumes they’ll get the full amount – which they know they won’t. That means the only  way Adam Wedrychoski / ABC Stairs Builders Corp can get a lawyer, and hence the only way he can sue us, is if he pays his lawyer hourly. Bottom line – he will lose a substantial amount of money if he tries to sue us.

While Adam Wedrychoski / Traditional Stairs Corp has to have a lawyer, we’re individuals, so we can represent ourselves (this is one of the advantages of not putting our building in an LLC). The courts are very lenient with pro se defendants – there are actually judges that only hear cases with pro se defendants. Plus pro se defendants can go in and get free help with filing paperwork, etc. So while it can be time consuming to show up at all the hearings, it doesn’t actually cost us much of anything. Meanwhile he’s paying his lawyer hourly, so if you do the math its in our best interest to drag things out and have as many hearings and motions as possible. 😉

If Adam Wedrychoski / ABC Stairs Builders Corp sues us, the first thing we’ll do is a show cause motion – making him prove that he has standing to sue us. He will fail because he can’t produce a contract with us. No contract = no enforceable terms.

Incidentally, people often think that the loser pays the winners attorney fees, but that’s not the case at all (at least not in New York). That only happens if you have a written contract saying that’s what you agreed to – and of course Adam Wedrychoski / Traditional Stairs / ABC Stairs Builders has no contract with us. That is why we’re confident Adam will lose money if he pursues this, but it gets better…

If he does survive the show cause motion, our next step will be a counter suit. The stairs in the rental are not according to plan – they’re too narrow (the stringers are not flush with the sheetrock), and they’re made of red oak, not white oak. On top of that, the stairs in our unit are not square and the contractor had to correct a number of things that Adam / Traditional Stairs didn’t quite get right. In fact things are so bad our architect suggested either we or our contractor sue him for everything he’s received – about $20,000. At one point we detailed a whole list of things that we wanted him to fix and he never came back to fix them – instead the contractor had to take care of it.

In case you’re wondering, Adam’s / ABC Stairs Builders Corp’s lien is an attempt to get paid for having to fabricate and install the flight of stairs from the parlor to the 2nd floor three times. When this was all going down we insisted that he do shop drawings, he refused and promised to fix any problems that resulted from not having shop drawings. I even mentioned that understanding up in a blog post. He even started before our architect gave him the green light. If he had just waited for approval to start we could have avoided at least one of those fabrication/installs. Plus, we’ll have our contractor, and our architects testifying that that we did in fact insist on shop drawings and that he agreed to fix anything that was a problem.

There is simply no way he can win his case, but I’m pretty sure we can win a fair amount of money on our counter suit. That means if he sues us, between lawyers fees and our counter suit, it will be a lose-lose proposition for him. Which is why our attitude is “bring it on”…

Thing is, all of this affects our contractor more than it affect us. The contractor is liable for the actions of his sub-contractors – including any liens they put on us. So the bond money is coming out of what he would have gotten at the end of the project. All Adam has accomplished with the lien is hurting someone who used to consider him a friend.

The bottom line is, be careful in dealing with contractors and subcontractors. Lien waivers and receipts of “final payment” are always a good idea. And summarize important conversations in writing/email after they occur so there’s documentation. Then when you get a mechanics lien, just bond it and put the ball back in the workman/contractor/subcontractor’s court.

Honestly, I think a lot of (sub)contractors don’t understand the process and have never heard of a bond. They just hear that liens scare some homeowners into settling. They don’t understand that they may actually have to sue the homeowner to get any money. They definitely don’t seem to understand that filing a lien starts a process which could result in them losing a considerable amount of money…

As a homeowner just realize you don’t have to settle with someone who is putting a lien on your property to harass and intimidate you – you can bond the lien and regain the upper hand in the situation.

5 thoughts on “What To Do When You Get A Mechanic’s Lien

  1. Filing the paperwork with the courts to discharge the mechanics lien isn’t complicated, but it does require a certain amount of patience. Dealing with clerks at the courthouse may be frustrating, only because, like so many government agencies, there simply are too few bodies available. If you understand what their jobs are, you’ll find that they are very helpful to pro se defendants. Treat them with respect, and they will do the same. Here are some of the things that need to be done. Again, speak to a lawyer first, before trying to undertake this yourself. This is not legal advice. Every situation has different legal ramifications.
    After bonding the lien, you must have a third party service a copy of the bond to the person/company who had filed the lien against you. This means get a friend to certify-mail a copy from the US post office, and then have the friend sign a notarized document saying that they mailed the document. This affidavit is a required document which must be filed with the courts in order to discharge the lien. The following are the instructions I received from the clerk while discharging the lien (basically a checklist of required documents.)
    Discharging a Mechanics Lien pursuant to Section #19(4) of the Lien Law:
    1. An application for the purchase of an index number. (Cost of index number $210.00; payable by cash, attorney’s check, or US postal money order, payable to “The New York County Clerk”) (FYI: They take credit cards at the cashier’s counter. This is done at the end, once the judgment clerk reviews your documentation, and approves their filing.)
    2. A “data correct” stamped copy of the mechanics lien that is to be discharged. (This is verifying that the lien is filed with the courts properly. Do this first, so you only have to stand in the slow line once.)
    3. A surety bond in the amount of 110% of the lien. The bond should contain the following:
    • acknowledged signatures of the principal and the surety
    • the block and lot number of the property
    • the address of the property
    • the original amount of the lien
    • the date the lien was filed
    • a statement that the surety is authorized to do business in the State of New York, or a “Certificate of Solvency Under Section 1111 of the New York Insurance Law” form should be attached to the bond. (The bonding agent should provide this documentation when you bond the lien.)
    4. An originally signed affidavit of service of a copy of the bond on the lienor (or the lienor’s attorney, if this information is provided in the lien.) The bond must be served prior to discharging it (this is what I describe above, regarding having your friend mail a copy.)
    5. An affirmation requesting that the county clerk discharge the lien pursuant to section 19(4) of the lien law, and identifying the lien to be discharged. (This is simply a notarized document stating your intentions to the court.)

    • thank you having major problems with a roofingtv company in Colorado. I made the payments he claims to have gottenb only one not the last two Now, iin cant find my money order stubs and having major health issuses that dont allow me to look for them. The bill is for 4400 he’s sueing for 15,000.

  2. Good heavens, what a nightmare! I’ve heard these mechanic’s liens could be a bother, but I had no idea it could be this awful! Good luck to you. I hope you get the justice you deserve.
    It sounds like he’s probably gotten away with this before. Your knowledge of the process (from unfortunate previous experience) is your ” secret weapon.”. Again, good luck.

    • Thanks, MD. Contractors historically have used mechanics liens as a way of pressuring additional payments out of a client. It is really easy for them to do it, and there is no requirement by the courts to even prove that there was any sort of agreement or contract with the homeowner.
      Jay and I would like contractors to know that with the internet, placing a lien is no longer “confidential”. Potential clients and customers need to know that certain contractors liberally use this tactic to try and force an unwarranted payment, once the business relationship has ended. Adam Wedrychoski / Traditional Stairs / ABC Stairs Builders does this. Bilian Angelov at ABS Design and Construction does this.

  3. Thanks for the information. In NY, a company cleared leaves from my yard and demanded an extra $100 for travel (with no prior notice of travel cost and no contract). Not to mention extra travel was needed because of their screwup. I refused to pay the extra $100 and now they’ve threatened me with a mechanic’s lien. I think I may go with the “bring it on” mentality since 1) clearing leaves is not a property improvement. So while surely NY won’t stop them from filing, perhaps I can get it discharged 2) I think they are bluffing since filing fees + lawyer is not worth getting $100 back. 3) We have no contract