Recourse for consumer who’s hvac contractor did not pull a permit and installed illegal furnances?

I hired a licensed contractor who installed 2 hvac units in June. The upstairs unit isn’t cooling the area properly and the contractor still hasn’t addressed the problem after 2 months. I had another local hvac contractor evaluate the work that was completed and was immediately told the furnances that were installed are illegal in our area and that the contractor obviously didn’t pull permits for the installation. All of this makes since now because after the installation there were no checks done on the system to see if it was functioning properly. I even asked if they were going to check the ducts and they always pushed it to the side and never completed it. They pretty much came in swapped out the units and left. I was told by this other contractor that if permits were pulled that certain tests are required to test for efficiency and safety. The contractor also found other code violations that he states would’ve never been allowed if permits were obtained. I didn’t pay them the full amount yet because I wanted my upstairs unit cooling properly. They are now refusing any further work and sent me a notice to place a lien on my home. These furnances are going to have to be pulled out and replaced and this contractor is threatening to place a lien on my home for illegal work he performed. What is my recourse for this situation? Any advice would be appreciated.