If you own or manage property you’ve probably had a lien filed against you at some point. I’m not implying that you don’t pay your bills only that the odds are at some point someone has filed a mechanics lien against your property. The idea of a mechanics lien as a tool to collect payment for services rendered isn’t objectionable but the lack of controls over whom and when a mechanics lien can be used is objectionable. Certainly a person who provides labor and material to make repairs to your property and does the job professionally to its completion should be paid for those services in a timely manner. However, a person who fails to complete a project or does complete a project although it is unsatisfactory should not be paid until the project is satisfactorily completed. If the repairs were professionally completed and the provider is not paid by all means they should have the right to file a lien. However if the work is incomplete or not professionally completed the provider should have no right to file a lien. Unfortunately anyone who feels they deserve to be paid can file a lien and the county clerk will process it. It doesn’t matter if they’ve done the job right or not they can file the lien.
Here is a current experience as an example. I hired “ Asphalt Company” to do repairs to the parking lots of several of my company’s commercial properties. The asphalt company began work in the spring on a large parking lot project requiring several days to complete. Because this was a retail center the provider had to do repairs in sections so that customers would still be able to conduct business with the retailers. When the provider had completed the project he requested I walk the property with him and conduct an inspection and give approval for him to be paid. When I walked the lot I saw that one entry point to the property had not been repaired. I mentioned to the provider that this needed to be done prior to payment. He argued with me at first and then calmed down. He told me he needed to be paid so that he could start the next property for me. I told him I would approve payment if he
promised me he would come back and finish the work. He promised he would and he was paid promptly. As the days went by other projects got completed to satisfaction and the provider was paid but he still hadn’t come back to complete the unfinished work. We were now down to the last project I’d contracted with “ Asphalt” and I was pushing them hard to complete the promised work. Our business relationship was becoming adversarial as I got the feeling the provider had no intention of fulfilling his promise to me. When the provider finished the last project I proposed paying 50% now and the other 50% after the property’s owner had an opportunity to view the work. The request was granted and a check for the first half was mailed out. The owner was out of town for a week and during that time I tried repeatedly to get the unfinished work completed. The provider told me that he had no intention of doing the work he’d promised. When the owner returned and viewed the property they were not happy with the work. I contacted the provider and requested a meeting between the provider and owner. The provider accused me of leveraging the final half of the payment on the last project against the unfinished work he’d promised. This was not the truth but the argumentative provider would not listen and refused to meet. He told me to either pay the remainder of the money he was owed or he’d file a mechanics lien on the property. I informed the property owner and they requested the provider’s phone number so they could talk to the provider. The property owner’s call was received no better than mine and when the conversation was completed I was informed that the provider had demanded to be paid or he’d file a mechanics lien. The property owner deserves to have the project completed to their satisfaction and I know from the earlier experience with the provider that his promise isn’t credible so he should not be paid until the work is completed. The treat of filing a mechanics lien is equivalent to extortion but the provider knows from experience that the county clerk isn’t concerned whether the lien is fraudulent or not.
Mechanics liens have their place but should be more tightly controlled so that dishonest providers don’t use them to extort payment from unsatisfied customers.
CEO, Employing Broker
Katchen Company, founded in 1962, is an integrated real estate company with its corporate headquarters in Lakewood, Colorado. The company offers real estate development, redevelopment, property management, brokerage, consulting services, construction oversight and maintenance services to individual and institutional real estate investors throughout the greater Denver metropolitan area in Denver with satellite offices in Chicago, Las Vegas and Miami market areas.