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Can a shady contractor file a mechanics lien on my house because I fired him?

I hired a contractor to do remodel of my laundry and bath in my house. We had no contract, but he gave me a bid of work that I agreed to, but didn't sign. We had a verbal and written agreement that if he was not going to come to work daily and give full day's effort, that we would settle up and part ways at that point. 1 and a half months into a 2 week project, the contractor failed to show up for 2 days and we decided to fire him. I paid for all the materials during the job and gave him 3 different money draws to help him rent equipment and pay his subs. He is threatening to file a lien on my house, but we didn't have a contract and he broke his agreement of working every day. The contractor also did not give us a Preliminary Notice before starting the job. So, can he file a lien on my home?

2 replies

Apr 25, 2021

In my experience as a Contractor in the State of Michigan for 30+ years, a lien is only valid when the contractor meets the following (3) requirements: 1. The contractor is legally licensed (both can usually be verified online): A.) to perform trade services in your state of residence > If he is conducting business as a Sole Proprietor (his, he should be registered at the County level under an Assumed Name/DBA. > If he is conducting business under a business entity name, then the business entity should be licensed at the State level to recognize his company as a legal entity). AND/OR B.) licensed by your state as a Residential Builder. If he's performing "remodeling" services and licensed as a Maintenance & Alteration Contractor, then he is working outside the parameters of his license, thereby the lien is not valid. 2. The contractor obtained a signed, written agreement/contract clearly documenting all three of the following: A.) Offer to perform a service (ie...remodeling your laundry room & bath) B.) Consideration (ie...how much he is charging you) AND C.) Acceptance (ie...your signature approving his offer & consideration) If you didn't sign the contractor's Bid form (ie...Offer & Consideration) then you didn't enter into a legally binding agreement/contract. However, you gave him money (ie...consideration) for material, draws for labor & equipment and you allowed him to enter your home to start the project, which may legally imply a verbal acceptance. Also, in today's world of technology, if you communicated your acceptance via email, voice/text message, they too are all legally binding forms of communication. If no such communication exists to establish a legal written agreement/contract to validate the lien, the Judge will dismiss the lien if/when the contractor files a lawsuit to foreclose on your property. Now, if the Judge validates the contractor's lien to move forward with the foreclosure lawsuit, the only defense you could argue is that the contractor breached your timeline agreement, but only if you have it in writing and both you and the contractor signed it. The typical rule of law to follow is, "if it's not documented, it didn't happen". Verbal agreements are legally binding but very difficult to prove which is why a written agreement/contract is typically required to validate a Contractor's Claim of Lien. With regard to the contractor providing a Preliminary Notice prior to starting your project...In Michigan we call this form a "Notice of Furnishing". A subcontractor must provide this notice to the homeowner prior to starting their project so the homeowner can complete the information and return it to the subcontractor. The subcontractor must then post the Notice of Furnishing on the job during the project. This notifies you, the homeowner, of subcontractors working on your project in case the general contractor fails to pay them. If you signed a written agreement/contract directly with the contractor performing the remodel service (ie...general contractor), then he does not need to provide a Notice of Furnishing to you prior to starting the project as you are already aware that he will be working on your job and will expect to be paid in return for his service provide. In other words, the Notice of Furnishing can not be used in your defense if a Judge validates the contractor's Claim of Lien. We've had to file a handful of liens in my business and to ensure the lien is valid, you have to have all your ducks in a row to ensure the lien process was PROPERLY AND LEGALLY filed. If your contractor failed to present a service contract or any other legal agreement for you to review and approve with your signature before he began the project, it doesn't sound like he's too concerned about legalities and will probably be deemed invalid and he'll be ordered to dissolve the lien from your property. But just to be on the safe side, if you haven't already done so, document every communication you've had with the contractor to establish a "communication log" in case you need to defend your actions to terminate your agreement/contract. I hope this helps guide you down the path you need to follow to protect yourself. Please don't interpret this information as legal advise as I am not a lawyer, only an experienced General Contractor/Builder. Should you have any questions or need clarification on my information, please feel free to email me. Best of luck in resolving this matter.

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Apr 25, 2021

I neglected to specify the 3rd requirement in my reply above, although I mention it briefly, I failed to include it in the list. 3.) PROPERLY completed and filed Proof of Service for Claim of Lien AND Claim of Lien. Again, this goes back to if your contractor failed to obtain your signed approval on the Bid form, he's not a stickler for details and the lien process probably won't work in his favor.

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