Michael Braga of the Sarasota Herald-Tribune (@MichaelBraga2) published an article last week titled “Harassing lien angers Sarasota senior,” reporting on a mechanics lien filed by Gulfeagle Supply against “a retired…resident living on social security.” The article is clearly biased in favor of the retiree homeowner and against the “harassing” company. It appears to be poorly researched, with Mr. Braga either ignorant or indignant of the supplier’s mechanics lien rights.
The Press Loves Homeowner Lien Stories – But Is It Fair?
A few months ago I posted about a situation in Hempfield, Pennsylvania where ABC Supply Co had filed a mechanics lien against a group of homeowners because a scrupulous roofing contractor took the homeowners’ cash and skipped town without paying its suppliers. The press loved the story because it pitting a big corporation against a group of homeowners who were clearly defrauded.
Slander and libel cases are tough ones to prove in court, but Mr. Braga’s irresponsible reporting tows the line here. At least the reporter in this situation was fair to the material supplier, interviewing an attorney who explained what a mechanics lien is and how they work.
Michael Braga’s reporting did no such thing. He completely ignored the material supplier’s legal right to file the lien claim (and the homeowner’s obligation to montior its payments to the contractor), an improperly called the material supplier’s lien “harrassing,” and publishing a comment from the homeowner insinuting that Gulfeagle Supply harassed people as a matter of course: “I wonder how many more people are being harassed by this company.”
Slander and libel cases are tough ones to prove in court, but Mr. Braga’s irresponsible reporting tows the line here. What is harassing about a company filing a mechanics lien claim when it has the right to do so?
Why Mechanics Lien Claims Against Homeowners Are Fair, Even If The Homeowner Is Defrauded By A Contractor
The homeowner in Sarasota is quoted in the Braga article as saying “I can’t help it if the man who was supposed to pay his bill did not pay it.” It’s a common sentiment. Consider a comment on the news story from “SRQIggy:”
[T] he owner is hiring the roofer (contractor) to do a job. It is not the homeowner’s responsibility to make sure that individual suppliers get paid by said contractor for materials that the contractor bought on HIS credit with the supplier. So, yeah, the supplier is one of the bad guys in this scenario. The homeowner can only do so much research into the trustworthiness of any roofing company (contractor).
The situation is this: A contractor takes money from a homeowner and runs. It doesn’t pay its suppliers. The homeowner is screwed…but so is the supplier. Who should be screwed more?
Mechanics lien laws exist all across the country, and contrary to the belief of some that the “lobbyist for the construction industry” is responsible for the laws (see 1st comment to article from “southcounty”), they have existed for nearly 200 years. Read the “Short History of the Mechanics Lien” post on this blog and you’ll see lien laws were first introduced by Thomas Jefferson to serve a very important purpose to our nation’s credit and construction markets.
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Here are reasons why the mechanics lien laws are fair:
Homeowner Is In The Best Position To Manage The Money
On every construction project the money starts at the top with the lender or homeowner. The homeowner pays the contractor, and the contractor pays its subcontractors, and those subcontractors pay their subcontractors and suppliers, and so on. The subcontractors and suppliers at the bottom of this payment chain have absolutely no control over the money. The property owner, on the other hand, does.
The property owner should (and is legally required to) manage where the money goes by distributing money to its contractor in accordance with the (i) amount of work completed; and (ii) amount of lien waivers and releases it receives from subcontractors.
There Are Tons of Consumer Protections for Homeowners
Homeowners are not left in the cold with the lien laws. The lien laws – especially in Florida – contain ton of protections for homeowners.
For example, a homeowner must be provided a preliminary notice at the beggining of the project from each and every supplier and subcontractor on the project. These notices contain in BOLD UPPERCASE AND OBVIOUS LETTERING a warning that the parties to the project have lien rights and that the owner has the obligation to control the flow of money. Homeowners who get tagged with liens ignore these warnings.
Homeowners Get The Benefit Of The Work or Materials
Finally, while there are situations where the homeowner must pay for work twice (if they fail to properly manage the project’s funding), at least the homeowners are the ones that receive the benefit of the work or materials that are furnished. It would be unfair to make the subcontractor or supplier give away their work or materials to the homeowner because of a contractor to whom they have no control whatsoever.
Homeowners Can Go After The Contractor For Their Money Back
Finally, the homeowners are in the best position to file suit against the contractor who defrauded them to get a refund on their money. The laws are very favorable to the homeowners to do this, and they are the right party as opposed to the subcontractor or supplier who didn’t get paid. The homeowners have a great fraud claim against the contractor, while the subs or suppliers would have simple contractual claims, and sometimes — if they are a tier or two below the defrauding contractor — they would not have any claim at all!