Massachusetts Mechanics Liens

What Every Homeowner Should  Know About the MASSACHUSETTS MECHANIC'S LIEN STATUTE When you hire a contractor to do work on your home, he or she typically purchases materials for the job and  hires subcontractors to do some of the work. No one would dispute that a homeowner should pay for goods or services provided to improve their home. What most homeowners don’t know is that, even if you pay the contractor, if the subcontractors, workers or suppliers your contractor hires aren’t paid, they can file what is called a Mechanic's Lien on your home. A Mechanic’s Lien is a  claim against real estate made by someone who contributed to improvements on the real estate. If there is no Homestead on the property, a Mechanics Lien allows the party who filed the claim to force a sale of the real estate to pay the claim. The lien is recorded with the Registry of Deeds and will appear whenever there is a title search done on the property, such as when the homeowner attempts to sell or refinance.  The main contractor has a direct contract with the homeowner, so if he isn't paid, he can sue on the contract and record a mechanic's lien. But subcontractors, workers and suppliers don't have a contract with the homeowner. A problem occurs when the homeowner pays the main contractor for all or some of the work, but the main contractor doesn’t pay the workers, subcontractors and materials suppliers that were hired to do portions of the job. If they are not paid, their only recourse is to file a Mechanic's Lien on the home. A lien can result in many different  problems for the homeowner.  If the homeowner doesn’t have a Homestead on the property, the lien holder can force a foreclosure.  To avoid foreclosure, the homeowner may find herself paying twice for the same job.  Until the matter is resolved, there will be a cloud on the title of the property, which can affect the homeowner's ability to borrow against, refinance, or sell the property.  In Massachusetts, for a Mechanic’s Lien to be valid the person filing the Mechanic’s Lien must file a law suit against the homeowner as well.  This means legal fees and court time for the homeowner as well. Fortunately, there are ways to protect yourself from these liens by carefully selecting your contractor and managing your construction project.  The first step, as with avoiding most legal problems, is do your homework.  Investigate your main contractor before you sign a contract.   Check with the Attorney General’s office, the Better Business Bureau, the Board of Building Regulations and Standards, the Office of Consumer Affairs and the Chamber of Commerce to see if there are any complaints on file.  If you’re building from scratch, make sure your contractor is licensed with the Board of Building regulations and Standards as a construction supervisor.  Hire only licensed contractors and check the contractor's license status on the State Board of Building Regulations and Standards.  Make sure your contractor hires only licensed subcontractors, and check their licenses, too.   Check with your local courthouse to see if the main contractor has a history of litigation against him.  Get a list of all subcontractors, laborers, and materials suppliers to be used by your main contractor and check with suppliers and workers about the payment history of the main contractor. Always make sure to have a written contract and make sure it contains a schedule that demonstrates when specific construction activities will start and end, (such as the framing, sheet rock work, or painting) and the projected payments tied to the contract price of these activities.  Make sure the contract identifies the subcontractors who will be performing these construction activities and the suppliers who are providing materials necessary for these activities. One simple thing you can do to prevent a lien on your property is to issue joint checks.  When the contractor presents a bill for materials or labor, compare it to the schedule of payments in your contract. Make sure that work was provided as described and then make out the check to both the contractor and the supplier, or the contractor and the subcontractor. Both parties will have to endorse the check, which will ensure that the subcontractors and suppliers get paid. If a lien is placed on your home, consult an attorney immediately.  There are a number of reasons a lien might be invalid; for example, the work was not completed or the supplies were not incorporated into the structure.  Often, lien claims are invalid because the contractor, subcontractor or materials supplier has failed to meet the required time lines or rules for filing the claim.   Remember, the best way to prevent a lien is to do your homework and carefully investigate the main contractor before the work begins.

 

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