When it comes to the construction industry, there are a lot of state and federal laws that must be followed in order to avoid potential litigation. But did you know that even if you think you have followed the law to the “T,” you may still face litigation, even for someone else’s irresponsible behavior?
What often comes as a surprise to many homeowners is the fact that a lien can be placed against their property in the event that a general contractor fails to make payments to subcontractors. Called a mechanic’s lien, this legal hold on a property holds the owner accountable for payments to the subcontractors, even if it was not their misconduct that caused the delinquent payment in the first place.
It’s worth pointing out that the way mechanic’s liens get paid off works differently from state to state. While in one state this lien can force the sale of a home to pay off the lien, in others it may result in difficulty selling the property.
The justification behind a mechanic’s lien is that the financial needs of the subcontractor outweigh the financial needs of the property owner. That’s because a subcontractor may owe someone else for the materials or services used, which could then lead to further litigation for them as well.
Even though it may seem unfair to the homeowner to put a lien against their property for someone else’s irresponsibility, it’s worth pointing out that they do have the right to file a lawsuit against the general contractor to recover payments made to them that never made it to the intended subcontractors.
Sources: The Pennsylvania Code, “Chapter 1650, Actions in Mechanic’s Liens,” Accessed Oct. 9, 2014
FindLaw, “Understanding Mechanic’s Liens,” Accessed Oct. 9, 2014