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Can person who did work for a Plumbing & HVAC company file a lien against homeowner?

Chat Hello. I am in Louisville KY and we are residential plumbing & HVAC service. We went to a home owners and installed an HVAC system. While we were there installing the system, we damaged the customers floor. We hired a person to come repair the floor and we were invoiced by that person. We TRIED to pay him, but he refused the payment because we withheld 24% backup withholding since he refused to provide his W-9. Now he is harassing and threatening the homeowner with a mechanics lien. Can he file one against the homeowner?

1 reply

May 29, 2019

Good question. In Kentucky, mechanics lien rights are available to contractors, subcontractors, sub-subcontractors, and other project participants when work has been performed to permanently improve real property, but has not been paid. So, where a contractor (i.e. any party hired directly by the property owner) has hired another party to perform work on the property, that party hired by the contractor may well have the right to lien if they've provided work but gone unpaid for some portion of that work.

It's also worth noting that there's a cap to how much retainage can be withheld on Kentucky private projects - so it's important to beware of running afoul of retainage rules and potentially incurring liability. In Kentucky, retainage cannot exceed 10% on private projects, and once the project is 50% complete, then retainage must be reduced to 5%. Further, retainage must be released within 30 days of substantial completion of the project, minus an amount equal to 200% of the value for any work remaining. And, a contractor must release retainage within 15 days of their receipt of final payment.

For more information on Kentucky's lien and retainage rules, these resources will be valuable: (1) Kentucky Lien & Notice Overview; and (2) Kentucky Retainage Overview.

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