Can I file a mechanics lien
ArizonaI am the general contractor doing a project with my cousin Bryce Coleman with just a verbal agreement. I put up 15 acres which he then split into 3 - 5 acre lots. Our agreement was he would pay me for my lots and we would split the profits in half when the 3 homes sold. three quarters the way through he filed a restraining order against me and said there was never any agreement. There is also a investor involved that loaned up $750,000 to build the three houses. Now my cousin is claiming the property is his and all the profits. I would like to file a mechanics lien to stop the sale of the house until he comes to his senses and wants to sit down and solve this issue.
1 reply
I am sorry for the issues. Let me start to your specific question. I will then close with suggestions on what you should do and next steps.
Did you serve a proper preliminary notice no later than 20 days after work started? Is the owner of the property your cousin or an entity? If so, then you could file a lien, however there is no guarantee this lien is enforceable depending on more facts. This is a complicated scenario and more facts are neded. If you have not filed a preliminary notice, which I suspect was the case, you may not file a lien.
More importantly, if the homes are listed for sale and going to close, you need to act immediately and a lien, even assuming you filed a proper preliminary notice, may not stop the sale. The title company may deem them as not enforceable and liens don't stop sales, exactly.
You need to hire an attorney to file to enjoin the sale and file a lis pendens. That would stop the sale unlike a lien.
You can also get this investor involved and that brings up possible ancilary liablity that your attorney will want to consider. In short, if your cousin proceeds with his plans and does not pay this investor, expect the investor to have the sense to hire an attorney and you two will be personally liable and sued in that action. However, if you two join that could be an effetive means to resolve this and reduce your liability. You face serious liability under these facts on the basis of contract and likely under securities laws.
If the homes are listed and, in particular, if they are under contract, you need to call an experienced attorney today who has expertise in these matters. We have been involved as general counsel in construction and in business matters and related suits. Our office and others offer free initial consultations and that is that is the first step.
Robert Murillo
robert@pivotallegal.com