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Can I place a lien and be successful with being paid on a foreclosed home?

We've done work on a residential property a few months ago and have not received payment. We just found out that the home has already been foreclosed on by the lender. If we pay for and place a lien on the property, what are our chances on being paid in full?

1 reply

Jun 4, 2020

As long as the property has not already been sold, you can still place the lien. But you will want to move immediately to file an action to foreclose the lien and to record a notice of lis pendens to cloud title and put everyone on notice of your claim. If the owners are in default, they are unlikely to respond to your lawsuit. So you can default them 30 days after service and obtain a judgment perfecting your lien. This will put you in line with other lenders to get a bite at the foreclosure proceeds. Whether or not you get anything depends on the debt to equity ratio of the property. You will have priority over any loans issued after the start date of your work. But all other debt secured by the property will have priority over you. So the question will be, after everyone with priority over you has been paid, is there any money left to pay your claim? It may be worthwhile to try, as you can use the lawsuit to pursue breach of contract claims and other collection claims as well. But it really depends on how much money you are owed. If you need legal assistance for this or other matters I am available for a free telephone consultation. To schedule email me at ryan@huntortmann.com.

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