canadiancontractor
Homebuilding client: Our contractor unfairly liened us!
This client believes she is the victim of a fraudulent or frivolous lien by a contractor. Ultimately, however, builders will only be able to successfully enforce liens when they can prove they have a legitimate claim. How can this problem be solved without both sides paying enormous legal fees?
Contractors, do you have any comments about this? Please post them down below.
We are stuck with a horrible lying contractor we hired to build our house. They took a $49,000 deposit July 7, 2017 but did not apply for permits until 5 months later – we did not get permits until February 2018. It is now the end of September and we have been bullied by and stressed out so bad by these guys. They do not care about the plans or the contract; they bill us for whatever they feel like, then stop working. We are not even at lock up 14 months after they took our deposit. I informed them that the contract expires Oct. 5. They abandoned the build on Sept. 10, did not finish to lock up, but wanted the lock up amount of $43,000 – then put a $102,000 lien on our house with no explanation.
Our lawyer, after only a few appointments, just sent us a $5,700 bill. He is a good lawyer and that is the rate – but it was still a shock. He knows we are getting screwed but contractors also know it is so expensive to fight them so they take advantage and do what they want. They threw a high lien on our place mainly to bully us, as they have been doing all along. So, in short, we are screwed if we can’t afford the lawyer. We are giving the lawyer every penny to fight them, because it is so wrong, but we are running out of money and still do not have a house. And we are paying high interest costs for the construction loan. Is there no help out there, other then the high priced courts, to stop these crooks? They prey on people like us and try to take everything we have worked so hard for.
No one will not sit down and talk or negotiate anything with us. They hired other contractors to build our house: the company owner I met three times and the project manager I met three times. But the project manager was never on our site. I know because I was there, staying in my trailer.
How do we get this unfair lien off our house without it costing us $50,000?
Della Mackie
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Depending on where you live. Gong to the local news paper or TV station can always bring in a bunch of bad press for the contractor. He’s a bully. Best if possible to fight back. Sucks for sure for you, my heart goes out to you.
Unfortunately there is little you can do to remove a Builders Lien without involving the Supreme Court.
You could try to negotiating a voluntary discharge. If you can’t negotiate a discharge, the Builders Lien Act has a few options that can be used quickly to have a lien discharged. There is the option of paying funds into court which stands in place of the land. This allows the lien to be removed. As you have a direct contract with the builder this may not be an option. Another way to clear title is to post security in the form of either money, a letter of credit, or a lien bond. The amount is dependent on the circumstances of the debt. You do not accept liability for paying out the lien nor does it does mean that they will be paid anything at all. Both are subsequently determined in the legal action to enforce the lien.
You could do nothing. In order to enforce their lien, they must start legal action within one year of filing the lien otherwise it will be extinguished. If there is no urgency to remove the lien off title, you could choose to wait to see if they enforce it. If they don’t, you can have the lien discharged due to the passing of time.
If you can’t wait, you can force them to start the process of proving their lien. The Act allows you to force them to commence legal action to enforce their lien claims by delivering a Notice to Commence an Action within 21 days. If they don’t started it within that time, the lien is extinguished.
Another option is if the lien is vexatious, frivolous, or abusive or is incorrect (ie. filed against the wrong property). If a lien is clearly invalid, the Act allows you to apply to the court to have the lien cancelled. Emphasis is on you to prove that the lien is defective (i.e. it contains an error in the name of the filing party or the client). However the lien is likely to only be cancelled if it is obvious that it cannot succeed. Unfortunately the courts are reluctant to throw out liens unless they are very clearly defective.
This is a very complicated area and you should exercise caution and talk to a lawyer prior to pursuing any avenue stated above.