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Can contractor file a lien when project is canceled before work has begun

I contacted a contractor to do a roof job out of pocket. The contractor suggested I had storm damage and that I should file an insurance claim. I did and in the end it went from a roof to a serious project worth over $70,000. At this point I don't want to work with the original contractor because it is a lot more involved. I signed a contract with the contractor early on because he said he would not help me with the insurance claim unless I did. The contract contains a statement that says if I want to cancel the contract without legal right, and the project has not started that they would be entitled to "Actual Cost" and "Not as a penalty" The contractor has never received any payment, has not ordered materials, or performed any work in relation to the claim. I need to know if this contractor has any legal ground to file a lien against my property even though they didn't do any work.

1 reply

Feb 24, 2020

If no work was done, then a contractor can't file a mechanics lien on the project. Mechanics lien rights are available when a claimant has furnished labor or materials that permanently improves the project property but goes unpaid for that work. And, the right to lien arises specifically as a result of the improvement to the property. So, if a contractor hasn't done any work for the improvement of the property, then that contractor won't be entitled to lien. However, that doesn't necessarily mean other claims won't be available to the contractor. If a contract was signed and then not followed through, the contractor may well be entitled to some compensation - though likely far, far less than the full price of the agreement. If it looks like a lien will soon be filed, or if it looks like a legal dispute is upcoming, then it'd be wise to consult a local Minnesota construction attorney about the matter. They'll be able to review the circumstances and advise on how best to proceed. Further, I think this article may be helpful: I Just Received a Notice of Intent to Lien – What Should I Do Now?

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