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How a homeowner can defend themselves against a contractor’s lien
This post is from a Quebec legal point of view, courtesy of Gino Di Ciocco
Last week we posted a comment from a homeowner who felt that their contractor had placed a “fraudulent” lien on their house – simply to bully them into paying for change orders that had not been agreed to.
Quebec reader Gino Di Ciocco replied with this lawyer’s-eye viewpoint on how homeowners can defend themselves against frivolous or fraudulent liens. (Editor’s note: Lien law varies by province. Mr. Di Ciocco’s advise comes from a Quebec perspective. It may or may not apply elsewhere in Canada.)
We also had another version of how homeowners can defeat contractor liens, back in October, from Finsbury. Read that again here.
Below are some ideas and defenses (in random order):
1) The Lien Law requires the total value of the work to have been approved by the Owner. Therefore, unless they have a mutual signed formal document(s) showing a total of $192,000 (i.e. $90 paid, plus Lien of $102 for unpaid contract balance.), the lien cannot stand.
2) Some jurisdictions permit the Owner to formally request a detailed Statement and Itemization of the Liened amount, which would provide you a “clue [of] what the $102,000 lien is for”. I’d have your attorney make a formal request.
3) Your attorney could try to dismiss the Lien for “willful exaggeration” by the Lienor. If proven, some jurisdictions permit fines and recovery of damages against the person who filed the Lien, in addition to the company itself.
4) Construction costs to correct or repair for mold caused by Contractor’s negligence failure to protect the work, could be a deduction to any amounts proven to be properly owed them in the lien.
5) In the interim, you can “bond off” the Lien through a Surety (at a very nominal cost), which can be renewed annually.
6) This would permit you to continue construction on your home at little risk — while the lien just sits there, until the Contractor files a lawsuit to foreclose on its lien – – which would ultimately be shown to be invalid in court.
Gino Di Ciocco
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Hello, I live in Quebec and have the following problem: I want to do a larger renovation and extension project on my house with the total cost of the project well into 6-digit numbers. Two contractors (both of whom are licensed and in good standing, as far as I could check) refused to do the work because I insist on having the clause in the contract where payment is tied to project milestones and conditional upon their proving that they have discharged all payments and workers’ compensation. They are offended. Obviously, I am terrified of the possibility of a lien being placed on my property and my life savings being put at risk. What can I do to satisfy the needs of both parties and get started with my renovation? Thanks