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Can an end-buyer put a lien on the property for "executed labor"?

MarylandRight to Lien

I have assigned a contract to an end buyer for a property owned by a foreign family that needs to get an ITIN and FIRPTA from the IRS. I have expressed upfront to the end buyer that the closing process could take months since application for ITIN and FIRPTA could take weeks. There was a delay on the seller's end to start the application of the ITIN and FIRPTA because the end buyer wanted to renegotiate the price of the property. On top of that, the previous government shutdown delayed the process as well. As we come nearer to the closing deadline, I requested a contract deadline extension from the seller which they willingly agreed/approved. Upon letting the end buyer know that the closing deadline has been extended in case the ITIN and FIRPTA won't get on time, the end buyer threatened that they have been patient long enough and will require either: 1) addendum to include an allowance for an extension of a per diem charge of $100 past the agreed upon 12 week date. or if I do not agree with this, 2) they intend to place a lien for the "executed labor" that has already been completed. Key notes are: 1) No one allowed the end buyer to do any work on the property and; 2) I just checked the property this week and there are no significant changes or improvements on it.

1 reply

Feb 26, 2019
I'm sorry to hear about that situation - it must be extremely frustrating, especially considering some of the circumstances, like the government shutdown, are out of your control. Generally, mechanics lien rights are available to those who perform construction work to improve real property but go unpaid for that work. i.e. Liens are typically filed by contractors, subcontractors, or suppliers who don't receive payment for the work they've performed. Other services or "labor" performed for a property, which does not actually improve the land or a building or other improvement on the land, will typically not give rise to mechanics lien rights. Of course, that doesn't necessarily mean that there isn't some recovery tool available, and it doesn't even mean that some other lien or encumbrance outside of the mechanics lien process won't be available. However, because the nature of the situation above doesn't relate much to construction, I'm afraid that it's a bit beyond our expertise here at the Construction Legal Center. There are some other online tools available, though, that might be able to provide some clarity here - such as Avvo or JustAnswer. Both sites connect individuals or businesses with lawyers from all different fields and locations, and they're available to answer questions on a multitude of topics.
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