If a builder went well over budget can they claim more than the original estimate?

1 month ago

If a home build goes well over the original estimate can the builder lien for the overage? We were estimated 323k but final tally came in at 340k with no changes.

Or can they only lien for up to the original agreed upon 323k.

Senior Legal Associate Levelset

Whether or not a contractor is entitled to payment over and above the contract price will ultimately depend on the contract. If the contractor merely provided an estimate, there are a whole host of factors that could lead to the contract coming in over-budget. And, if the price of the work is in line with how it should be calculated in the contract, and if there’s nothing in the agreement specifying that costs should be limited to a certain amount, then an owner could certainly be required to pay above an original estimate.

Specifically, under KRS § 376.010(1), the amount of liens on the property cannot exceed the contract price of the project. So, when a certain number is agreed to, and when that number is exceeded without any other agreement to increase the contract price, the amount of a lien will likely be limited to the initial contract price.

But again – this might be touch-and-go if the amount provided in the contract was merely an estimate and if the price of the work was to be calculated some other way.

For more information regarding Kentucky mechanics liens: Kentucky Mechanics Lien Overview.

Additionally, I think these resources might be helpful if a lien has been threatened or filed:
(1) I Just Received a Notice of Intent to Lien – What Should I Do Now?
(2) A Mechanics Lien Was Filed on My Property – What Do I Do Now?

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