Advertisement
YOU ARE HERE: LAT HomeCollections

Unfinished business

A contractor's lien over disputed fees can stop a home sale or refinancing.

February 22, 2004|Jeff Bertolucci | Special to The Times

Jody Costello's website is a must-read for homeowners who have endured -- or who hope to avoid -- dishonest or incompetent home builders and remodelers. The site, ContractorsFromHell.com, chronicles Costello's four-year ordeal adding a master bedroom to her Point Loma home overlooking downtown San Diego.

After Costello and her husband, Don, fired their general contractor Richard Turek for what they considered shoddy workmanship and unprofessional behavior, Turek placed a lien on their property for unpaid work, preventing the Costellos from getting a second loan on their house.

Turek's state contractor's license was eventually revoked as a result of the Costello incident, although he still disputes the online account that he used substandard materials, showed up intermittently on the job site and hired unlicensed subcontractors.

"That's ridiculous," Turek said. "We passed every inspection all the way until final with the building inspector."

Disputes between homeowners and contractors in Southern California result in tens of thousands of liens being placed on residential properties each year. In Los Angeles County alone, contractors placed nearly 10,000 liens on residential and commercial properties in 2003, according to the L.A. County registrar-recorder's office. Orange and San Diego counties recorded more than 4,500 liens, Riverside County had close to 3,300 and San Bernardino County, 2,295.

For The Record
Los Angeles Times Wednesday February 25, 2004 Home Edition Main News Part A Page 2 National Desk 4 inches; 151 words Type of Material: Correction
Mechanic's liens -- An article in Sunday's Real Estate section on mechanic's liens incorrectly stated that after recording a lien, a general contractor has 90 days in which to file a lawsuit, and subcontractors and suppliers have 60 days. In fact, after recording a lien, general contractors, subcontractors and suppliers all have 90 days to file a lawsuit. The article also stated that a general contractor who signs a contract with the homeowner has 90 days after completion of the work in which to record a lien, and subcontractors and suppliers have 60 days. It should have stated that the prime contractor, meaning the contractor with a direct contractual relationship with the owner, has 90 days from cessation of labor to record a mechanic's lien. If the owner files a notice of completion, however, the prime contractor has 60 days to record the lien, and subcontractors and suppliers have 30 days.
For The Record
Los Angeles Times Sunday February 29, 2004 Home Edition Real Estate Part K Page 6 Features Desk 4 inches; 150 words Type of Material: Correction
Lien time frames -- An article in the Feb. 22 Real Estate section on mechanic's liens incorrectly stated that after recording a lien, a general contractor has 90 days to file a lawsuit, and subcontractors and suppliers have 60 days. In fact, after recording a lien, general contractors, subs and suppliers all have 90 days to file a lawsuit. The article also stated that a general contractor who signs a contract with the homeowner has 90 days after completion of the work to record a lien, and subcontractors and suppliers have 60 days. It should have stated that the prime contractor, meaning the contractor with a direct contractual relationship with the owner, has 90 days from cessation of labor to record a mechanic's lien. If the owner files a notice of completion, however, the prime contractor has 60 days to record the lien, and subcontractors and suppliers have 30 days.
For The Record
Los Angeles Times Sunday February 29, 2004 Home Edition Main News Part A Page 2 National Desk 4 inches; 153 words Type of Material: Correction
Mechanics' liens -- An article in the Feb. 22 Real Estate section on mechanics' liens incorrectly stated that after recording a lien, a general contractor has 90 days in which to file a lawsuit, and subcontractors and suppliers have 60 days. In fact, after recording a lien, general contractors, subcontractors and suppliers all have 90 days to file a lawsuit. The article also stated that a general contractor who signs a contract with the homeowner has 90 days after completion of the work in which to record a lien, and subcontractors and suppliers have 60 days. It should have stated that the prime contractor, meaning the contractor with a direct contractual relationship with the owner

A mechanic's lien is a claim placed on a property by a contractor or materials supplier who hasn't been paid for a remodeling or home improvement job. For contractors, liens provide a way to collect unpaid bills from deadbeat homeowners. For consumers, however, liens are paralyzing, leaving them unable to sell or refinance until the lien is lifted -- whether or not the work was completed to their satisfaction.

Once a lien is recorded, the claimant has 90 days to file a lawsuit against the homeowner. "But few do," said attorney Stephen Elias, author of Nolo Press' "Contractors and Homeowners Guide to Mechanic's Liens," now out of print. Elias estimates that nine out of 10 liens don't result in a lawsuit.

"Contractors need a lawyer, and contractors are lawyer-adverse" because of the expense involved, he said. "When the contractor, or claimant, doesn't follow through and file legally, the lien is null and void."

Although a lien is a powerful tool for contractors dealing with nonpaying owners, it can be abused. "A lot of liens are from unscrupulous contractors or those with a checkered past," said Los Angeles attorney Leslie Steven Marks, a member of the arbitration panel for the Contractors State License Board.

Mechanic's liens often result in the so-called double payment dilemma, in which the homeowner pays twice for the same work.

Typically the owner pays the general contractor, who in turn pays the plumber, electrician, lumber supplier and so on. But if the contractor fails to pay these people, they can record a lien against the property at the county courthouse. Many owners, particularly those in a hurry to refinance or sell their homes, choose to pay a subcontractor or supplier themselves and try to recoup losses by suing the general contractor.

Larice Starr of Pedley, a town of 11,000 north of Riverside, paid $2,200 twice to a materials supplier when her house was re-roofed last year by Wooten Construction, which has since filed for bankruptcy. Starr has recovered roughly half of the second payment from the contractor's bonding company and is debating her next move.

"My only other recourse is Small Claims Court," Starr said, "and I have not pursued that action yet."

Cecilia Wooten, former office manager for Wooten Construction and the ex-wife of its owner, Thomas Wooten, said there was nothing she could do to help Starr recover the money. Thomas Wooten could not be reached for comment.

Double payments have long been the bane of homeowner advocates, including the nonprofit League of California Homeowners and state Assemblyman John Dutra (D-Fremont), which have fought for years to enact state legislation to correct lien problems.

Meanwhile, the construction industry has worked vigorously to protect current lien laws, saying changes would force subcontractors and suppliers to run credit checks on contractors -- an expense that would be passed on to homeowners.

"I'm not Chicken Little. I'm not going to tell you the construction industry will end if you do away with mechanic's liens. But it'll take about five years -- that's a guess -- to get it to move smoothly again," said Los Angeles attorney Sam Abdulaziz, spokesman for the Construction Industry Legislative Council, a trade lobbying group.

Such reasoning doesn't sit well with retired Los Angeles attorney Jim Acret, a pro-consumer consultant to the California Law Revision Commission, a state agency that reviews and recommends changes to California laws and statues.

Advertisement
Los Angeles Times Articles
|
|
|