non payments and liens

Randy88

That was educational.

I had a new experience this past year. Found out that here in CA if the bank forecloses on a property from the owner, and you had a valid mechanics lien against the property for work hired by the owner, that the lien gets wiped out when the bank forecloses.

Fortunately I only got stuck once, but it was for 17K. I would be concerned if I did a lot of work for private owners in these times. As many foreclosures as there are, I bet a lot of small contractors are getting hurt.
It just doesn't seem right that the bank takes the property you improved, and now they have no obligation to pay for the work???

Is that a federal law or just a state law about foreclosures? I thought a lien came before a bank and was there until it was paid off?? Stupid question but did you get any signatures on any paperwork from the owner that hired you, do they own any other property and can you go after that for collection or put a judgement against them personally and get a court ordered monthly payment??? Isn't the system great, my grandpa always said its " laws made by lawylers for lawylers. "

Been reading this interesting article so a few thoughts or maybe options.

A guy I know that pours concrete didn't get paid for a garage pad. After a long time of asking to get things squared away he showed up with his skidsteer and truck and hauled it away. I would be worried about getting my pants sued off. I think he could get away with it tho. He's a friendly guy and even if you really ticked him off he would treat you like an old friend.

That deal in CA about liens getting canned when someone goes bust is twisted. Out here I believe they will follow you and everyone else to their graves and beyond.

My Dad is in the heavy equipment repair business and I don't know of any business that is looked after lien-wise as well as mechanics. If he repairs someone's crawler and they show up and haul it off without payment or making arrangements it's theft, plain and simple. Even if a bank wants to repo a piece of equipment and it's on the mechanic's yard with an outstanding bill they have to pay in full before picking it up. In some cases they say that owner signed work orders aren't a requirement to file a lien but it does make it much easier.

I'd never recommend this one but I heard it was done a lot of years back and you might get a kick out of it all the same, it gives new meaning to "pay the bill or else"

This contractor put in a septic system for a private homeowner in the country and then tries to get paid and didn't get all the paperwork done on time and the owner and lender refuse to pay because his 90 days had run out to file a lien, he sues the guy and goes to court and loses, how I don't know maybe he had the same judge I had when I lost my collection case. Anyhow he's out the money and can't collect so he waits and several years later the owner fails to make payments to the bank and loses the property and the bank ends up with it. Now heres where it gets interesting, this contractor knows about the bank ending up with it and knows it takes several months before all the paperworks complete so the bank has titile to the property and in that transition period someone uses explosives and literally blows the septic system out of the ground, tank, lines, the whole deal and blows them all over the yard and I'm told the roof and side of the house as well.

Now heres the kicker, law deems this mess had to be cleaned up pronto, its a public heath hazzard and since the bank didn't have all the paperwork in order they technically didn't own it and the owner had defaulted on the loan he didn't either so he wasn't responsible for cleanup and his insurance company wasn't either because he had let his insurance lapse. So since the bank didn't own it legally and that meant they had no insurance on it they had to dig into their own pockets and pay clean up and also by law the installation of the second septic system as well. Now I've never seen a septic imploded or exploded but after several years use I can't imagine the smell or sight it would make. I've heard after that ordeal if there was a septic system installed if the owner wouldln't pay the bank would even if the paperwork wasn't up to snuff. Thats been a lot of years ago by now but it still makes for a conversation piece.

Oh yea I almost foregot, the guy that did't pay and lost his property, he gets remarried after his divorce and the second time around his new wife has money and she decided to build a new house, you'd never guess it but she has to pay up front all installation costs of the septic even though it wasn't the same contractor word had got out that someone a long time ago didn't get paid, so in the end, what goes around does come around. The contractor that got beat he once told me that after that he charged everyone 10 percent more and that covered those that didn't pay him on any given year and for legal professionalls like lawyers and bankers they got charged 20-30 percent more and money up front, that way the legal system worked in his favor right from the get go. Just a story and advice that was given to me over the years and thought you might like to hear it.

Randy88 said:

I'd never recommend this one but I heard it was done a lot of years back and you might get a kick out of it all the same, it gives new meaning to "pay the bill or else"

This contractor put in a septic system for a private homeowner in the country and then tries to get paid and didn't get all the paperwork done on time and the owner and lender refuse to pay because his 90 days had run out to file a lien, he sues the guy and goes to court and loses, how I don't know maybe he had the same judge I had when I lost my collection case. Anyhow he's out the money and can't collect so he waits and several years later the owner fails to make payments to the bank and loses the property and the bank ends up with it. Now heres where it gets interesting, this contractor knows about the bank ending up with it and knows it takes several months before all the paperworks complete so the bank has titile to the property and in that transition period someone uses explosives and literally blows the septic system out of the ground, tank, lines, the whole deal and blows them all over the yard and I'm told the roof and side of the house as well.

Now heres the kicker, law deems this mess had to be cleaned up pronto, its a public heath hazzard and since the bank didn't have all the paperwork in order they technically didn't own it and the owner had defaulted on the loan he didn't either so he wasn't responsible for cleanup and his insurance company wasn't either because he had let his insurance lapse. So since the bank didn't own it legally and that meant they had no insurance on it they had to dig into their own pockets and pay clean up and also by law the installation of the second septic system as well. Now I've never seen a septic imploded or exploded but after several years use I can't imagine the smell or sight it would make. I've heard after that ordeal if there was a septic system installed if the owner wouldln't pay the bank would even if the paperwork wasn't up to snuff. Thats been a lot of years ago by now but it still makes for a conversation piece.

Oh yea I almost foregot, the guy that did't pay and lost his property, he gets remarried after his divorce and the second time around his new wife has money and she decided to build a new house, you'd never guess it but she has to pay up front all installation costs of the septic even though it wasn't the same contractor word had got out that someone a long time ago didn't get paid, so in the end, what goes around does come around. The contractor that got beat he once told me that after that he charged everyone 10 percent more and that covered those that didn't pay him on any given year and for legal professionalls like lawyers and bankers they got charged 20-30 percent more and money up front, that way the legal system worked in his favor right from the get go. Just a story and advice that was given to me over the years and thought you might like to hear it.

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Something doesn't smell right about that story:tong but I like it

Well met with an attorney today to see what my options are. He said if it goes to court it will cost me a third of what is owed me for him. He is sending them a letter first to see what happens. I hope it works. I wouldn't think the company wants a law suit so maybe they will pay.

I hope it all works out for yas BIGDAN.

It's a shame things get this way, but some people don't care I recon. I may end up with egg in my face. I have worked with the fella I had troubles with again and right now not to far behind just tipped 30 days on the number 1 of about 6 invoices. For the record this was just busy working not relying on this income to survive.

Boophoenix said:

I hope it all works out for yas BIGDAN.

It's a shame things get this way, but some people don't care I recon. I may end up with egg in my face. I have worked with the fella I had troubles with again and right now not to far behind just tipped 30 days on the number 1 of about 6 invoices. For the record this was just busy working not relying on this income to survive.

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Thanks, I have another app. with the lawyer tomorrow. He says they have a proposal and that's all I know... Will keep you posted

The other thing that makes leins fruitless is that the Prime, Sub, or the Owner can post a bond in the amount of the lein, (for a cost of 1%-3%) and the property is free again. I have had several poignant moments trying to figure out how to manipulate someone into paying me what Im owed, I have never been hurt by standing my ground. I have observed that pulling off of the job is a sure way NOT to get your money, but continuing to work isn't usually fruitful either. I try to stay on the job without really working, and work any leverage I can find against the debtor. I have learned in my short career though, that you CANNOT ever just let someone out of a bill.... it sets a very dangerous precedent. Also, a lein will never work go in front of a bank on a piece of property that has been financed. If you are concerned about your money going into the project, have a title company do a title search on the land. Thats what the bank does before they lend on it. If there is a deed of trust of a lein on the property for any reason, you will be in line behind it.

Update

Well after about 5 months and a $ 600 bill from the lawyer I finally got a check. I setled for 2 grand less than what they owed me. I would of ended up with allot less if had gone to court with the atnys fees being 1 third of the collection. I don't have one good thing to say about this outfit and will spread the word around about them...:ban

Congradulations Dan. I'm glad you got it sorterd out and it didn't cost you a fortune. I've almost got mine settled up as well. Just one more payment out standing ( down side I went ahead and payed some subs I brought in out of my own pocket to protect my reputation and friendships with the subs ). Luckily it isn't a very large amount.

Bet lawyers are loving these times as the are making fortunes. Recently hada friend go to court on a charge Lawyer told her she could help her out. $750 for first court apearance. Then told her she had to plead guilty or fork up 1500 more for representation and would likely get the same outcome of pleading guilty.

Anybody came across this scam yet, a couple own a piece of property for a lot of years and you've done work for the husband in the past many times for small jobs, lets say they own a house for simple example on an acreage, you've never had problems collecting in the past and this time seems no different, the wife is gone visiting family and is expected to be away for at least a month or so due to an illness in the family or some such tragic ordeal. Being the hero of a husband he is he's going to fix up the property a little to surprise her while she's away and wants to do some improvements to the house and some landscaping to cheer her up when she gets home. Lets say the house needs a new roof and a remodel to the kitchen and new siding and some landscaping and something to help the curb appeal as they say. To hurry this up he hires several different crews to get all the work done while she's away and they all show up at once to get it completed in say less than 30 days. Any money down is either paid with a personal check of his or by a credit card and he wants all bills submitted directly to him so she's not fully aware of the total costs and all agree to this arrangement, most even have him sign a work order and all the paperwork's in order. By the time she gets home all the works done and bills are submitted and it looks real impressive, now here comes the kicker, nobody can get paid the remaining amount and they go after the owner and even take him to court only to find out the property has been put in her name only and then she claims she had no knowledge of the work being done and since none of the billings were in her name she isn't responsible for any of them, any liens or suits are dropped and nobody gets a dime from her in any form and they can go after the husband but he has nothing in his name but credit cards or upside down vehicle loans which are worthless.

The scam being pulled is simple, the couple are facing foreclosure on their house and due to lowering values they owe more than what its worth, now if they put in a lot of improvements that don't cost them anything it'll bring up their valuation to more than they owe making it a good loan and if they are forced to sell they come out ahead with some money to spare, the house is in her name and she signs nothing and agrees to nothing thus she won't have to pay for it and all the paperwork backs up her story in court and its all done against her consent or knowledge so she doesn't have to pay but gets the increase in value to her property just the same, now the husband is left owing but nobody will go after him he has nothing to his name and never will and since there are so many contractors involved no amount is that great to make it worth their time to try collecting and the scams complete.

I didn't get hung this way but a friend of mine did this past year and was more than a little hot over the deal but his attorney advised it wasn't worth his time or money to spend more than what he was owed and to write it off to experience, now he does paperwork checks as to who's name the property's in and has all owners sign and has a larger portion of money down, if the property's changed hands recently he demands all money up front with signatures. Just thought you might like to know about how it works and why they do it.

Randy that's a dirty trick.


I would think that would fall under conspiracy to commit fraud. The contractors may not get paid in this case, but I'm pretty sure that some people go to jail for fraud depending on what they did.

Its not considered fraud because according to the way it was explained to me the contractors can still go after the husband or whoever signed the work order but the problem is that party never has anything in his name as far as assets go so nobody bothers to even go after them, it'll cost more than what they'll ever get. The other problem with it is the contractor just assumed that the property was still owned jointly and never bothered to check so technically its his fault for not doing his homework and no fault of the wife or property owner whoever has the property in their name at the time. So legally you'd have to prove they intentionally scammed you out of your money and that's about impossible to do.

I just wanted to pass it along because until my friend told me about it I had never heard of it or how it was done and he did get burned in court over the deal and was rightfully pissed about it.

Remember desperate people will do desperate things to hang onto whatever they can in tough times and use whoever it takes to achieve it, or as an attorney told me " just do your homework and only work for those you trust and have ALL the paperwork signed by ALL the people involved". I can't say that I agree with him but I can't say he's wrong either or as he put it " its the rage of the age, cope with it the best you can and cover your ass".

It's good information and I'm glad you shared it. Sometimes people suck.

I'd be tempted to go back and return the site to the previous condition.

Randy88 said:

Its not considered fraud because according to the way it was explained to me the contractors can still go after the husband or whoever signed the work order but the problem is that party never has anything in his name as far as assets go so nobody bothers to even go after them, it'll cost more than what they'll ever get. The other problem with it is the contractor just assumed that the property was still owned jointly and never bothered to check so technically its his fault for not doing his homework and no fault of the wife or property owner whoever has the property in their name at the time. So legally you'd have to prove they intentionally scammed you out of your money and that's about impossible to do.

I just wanted to pass it along because until my friend told me about it I had never heard of it or how it was done and he did get burned in court over the deal and was rightfully pissed about it.

Remember desperate people will do desperate things to hang onto whatever they can in tough times and use whoever it takes to achieve it, or as an attorney told me " just do your homework and only work for those you trust and have ALL the paperwork signed by ALL the people involved". I can't say that I agree with him but I can't say he's wrong either or as he put it " its the rage of the age, cope with it the best you can and cover your ass".

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Thats odd because here they tell me that if your married both are responsible for the payments.Like credit card and so forth.