Unfinished business

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.

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."