When you hire a company or individual to work on your home, you enable them to place a lien on the home if you fail to pay them. Direct contractors, subcontractors, laborers and suppliers can place a "hold" on your property, preventing you from selling, refinancing or conveying ownership before honoring the debt. A roofer doesn't need your permission to slap your home with a lien, but he must follow your state's protocol for filing a mechanics lien.
Lien on Me
A roofer can place a lien on your home for repayment of his labor or supplies. Even if subcontracted, the roofer can file a mechanics lien against your home, rather than against the general contractor, if the general contractor failed to pay the roofer. As the homeowner, you are ultimately responsible for ensuring that anyone contracted to work on your property receives payment. The fact that a roofer can ultimately enforce a lien via foreclosure if you refuse to pay him can be disturbing, especially if you already paid an unscrupulous contractor and he failed to pay the roofer.
Legal Costs Through the Roof
A mechanics lien involves litigation and hefty legal fees. Hiring an attorney to fight a lien in court can cost between $5,000 and $15,000, according to HouseLogic. Using an attorney to review and get an invalid lien thrown out costs about $1,000. Because of this, disputes or liens for relatively small amounts are usually best settled with the roofer outside of court. You might also consider suing the general contractor you already paid -- if he's still around -- for reimbursement. You might have a good chance of recouping your losses if you can prove that you paid the general contractor for the roofing project -- via receipts and invoices -- and he acted in bad faith by skipping out on the roofer.
A High Price to Pay
You might end up paying for your roof twice when a roofer takes out a lien on your house: Once for the amount paid to a direct contractor, and a second time for the lien. The other worst-case scenario, foreclosure, involves losing your home to pay off the lien. According to HouseLogic, a legal claim against your property "could force your house into foreclosure within a year to pay the debt if you don’t write a check yourself." This can happen if you fail to settle out of court or you lose in court and otherwise fail to pay the lien.
Shelter Yourself from Possible Liens
To prevent a roofer from placing a lien on your home, get a lien waiver. HouseLogic notes that this is "a legal document furnished by the contractor or subcontractor at your request. By signing a lien waiver, a contractor or subcontractor agrees that they have been paid in full for work completed and that they no longer have the right to file a lien against your house." You might also make arrangements with the contractor so that you pay the roofer separately. This method prevents a contractor from cheating the roofer, and you, out of payment. You can save yourself a lot of potential headache by choosing reputable contractors or roofers based on referrals and references, and by checking them out with the appropriate licensing board and a business ethics organization for consumer complaints, says HouseLogic.
- Andy Sotiriou/Photodisc/Getty Images
- What Is the Grace Period to Get Out of a Home Contract?
- I Need Help in Restoring My Credit
- How Does Loan Reassignment Affect Your Credit?
- Can You Sell a Messy Home?
- How to Live Wealthy When You're Poor
- How to Budget Your Finances While in a Lot of Debt
- How to Get Married With Little Money
- Do Both Husband & Wife Have to Sign the House Rental Lease?
- Can I Get Out of Closing on a House Without Losing Money?
- How to Figure Out if You're Going to Owe or Get a Refund on Taxes