My construction company was hired to convert a garage into a two-bedroom, one bath living area with a living room and a little space for laundry. We met with the homeowner to get the info for an estimate. She informed us that the tenants living upstairs had reported her to code enforcement because she had someone doing work in the garage and did not pull a permit, resulting in a Stop Work letter from Pikes Peak Regional Building Dept. She said that when the inspector came out, he could only see a small portion of the garage, so that is all she would get a permit for...seemed a little shady but whatever. After two hours of her telling us what she wanted and us telling her what was feasible, we felt we had the info we needed to give a proper estimate. Submitted the estimate which she agreed to and then emailed her a contract. She was adamant about getting the job done ASAP so she could sell the property, so we started before she signed the contract. That was on 02/05/2023 and as of today (06/05/2023) I still don't have a signed contract. She signed the estimate. In the contract we put down a completion date of 04/30/2023 which we did not meet that deadline because of personal tragedies and the homeowner requesting additional work and changes. No change orders were signed. When we were 90% done with the project, we needed money for materials and labor to finish. We presented her with a $26,000 invoice for the 'extras', which included a full kitchen, three additional subterranean egress windows and several other items. She said that was too much, and she would not pay for it. What we charged her for all the extra work was well below the national average and more than fair. She still owed $2500 on the original contract, which she paid 05/30/2023. She agreed to pay $17000 for the extras. We told her we needed $8000 to finish the job, and she cut a check on 06/02/2023 for $3000 and said she would pay the $5000 on Monday. We went to the job Saturday morning to find she had changed all the locks. We have called her and left messages but no response. Do you think filing a lien would be successful? How should we handle the homeowner reneging on the agreement we had and changing the locks with no notice? Is her paying $3000 toward the extras invoice significant?
I am sorry for the issues. Certainly, provide the notice of intent to lien and then file the lien. I would suggest that you hire an attorney for the lien and for the demand as the cost is often the same as using a service, while a demand from a law firm will carry much more weight.
As to whether it will be succesful, there is no way to know. If they have plans to sell the home shortly, it would likely result in payment. If not, then it all depends. Often a lien for a residential project will not result in payment as, frankly, the likelihood of the contractor enforcing the lien is slim. That's becasue the cost to enforce a lien would be thousands to tens of thousands of dollars. To enforce a lien requires filing a district court lawsuit and requires what we call a litigation guarantee and more. In the first month, you would pay more in legal fees and costs then what you claim.
For this amount of money I suggest you file a lien and see if that works. If it does not work, then file a lawsuit in small claims.
Reach out to discuss the lien filing and steps. Also, never do a project without a signed contract in place. Never. I would also strongly advise that your attorney reviews your contract as unless it was done by an attorney with expertise in construction law, I can almost guarantee it is poor and does not protect you and your company.
Robert Murillo
robert@pivotallegal.com.
Thank you for your prompt response. Do you know of an construction attorney in or around Colorado Springs, CO that offers free or low-cost consultation?
I am reaching out for assistance to file the lien. Mainly I am not sure which lien to file. It's my understanding that there are two types in Colorado. Also, I do not know where to obtain the correct form. There a lot of options on the internet and I am not confident that those sites offer the exact form required. Again, I thank you for your time and attention to my issue.
Send an email to robert@pivotallegal.com with the name of the homeowner and address and your contact information. I practice for clients all over Colorado and Arizona. You do not need someone in the locale at issue.
Once I get your email and the information, we can set a time to talk.
Thank you.
Hello Robert! I successfully filed the lien. I just heard that the owner sold the house to a flipper. Does this mean I will be paid?
Hello,
Likely not. The standard process for a timely and properly done lien is that they get paid prior the sale to release the lien. It is possible that your lien filing or the timing was done improperly and the title company did not require the lien to be cleared. A lien must follow the statutory requirements to the letter. If it does not, what is filed is invalid and is often ignored.
Lien was good. Seller/owner did not disclose that there was a lien. Sold to a flipper that likely didn't go thru title company or do title search. The flipper is asking me to email the contract and lien to them.
I will respond by email. I sent you one this morning. This site is not private so this should not be discussed online. Contact me by email. Thank you.