Home>Levelset Community>Legal Help>Project completion was delayed due to family illness. Homeowners refused to sign change orders to pay for flooring that was over the amount in the proposal, also refused to pay for a couple other things. They fired the contractor via a letter from an attorney wanting to call the partial payment made to date resolution of the contract but still refuse to pay for additional items. Work is primarily finished. Should contractor file a Lien?

Project completion was delayed due to family illness. Homeowners refused to sign change orders to pay for flooring that was over the amount in the proposal, also refused to pay for a couple other things. They fired the contractor via a letter from an attorney wanting to call the partial payment made to date resolution of the contract but still refuse to pay for additional items. Work is primarily finished. Should contractor file a Lien?

MichiganMechanics Lien

Homeowners sent a letter via lawyer terminating the contract due to project delays. There is a small outstanding balance. They chose flooring that was over the budget and refused to pay as well as demanding items not in the proposal be installed without them paying. This is most likely because they went way over budget on other items throughout the project. They had police meet contractor at their home to remove tools. They want to call it all evened up at this point. Wondering if a lien should be filed or if contractor should attempt to negotiate for resolution.

1 reply

Oct 9, 2018

That sounds like quite the dispute. Whether or not a lien should be filed is ultimately a judgment call that each claimant must make. On one hand, if payment is owed and unpaid, a lien claim is a great tool to compel full payment. At the end of the day, everyone deserves to be paid what they've earned. On the other hand, filing a lien will almost definitely escalate the dispute - and if only nominal amounts remain unpaid, then filing a lien could ultimately end up costing more than its worth, especially in a situation where an owner is ready to lawyer-up. Weighing the costs and benefits of a lien claim is a tricky balance, but it's an exercise each lien claimant must perform. One option may be to send a Notice of Intent to Lien and see how the owner responds. Because a lien claim is such a drastic remedy, the threat to file a lien must be taken seriously and will often lead to payment. Plus, sending a Notice of Intent to Lien is less costly and relatively harmless. While it could anger an owner, the threat of lien should create no actual harm and might be a good way to see how the owner would respond to a lien filing. But, if a Notice of Intent to Lien is not helpful in forcing payment, a mechanics lien might do the trick. At the very least, it could start negotiations. Plus, if a lien claim is filed and the dispute gets to be more trouble than it's worth, a lien claim can typically be released without too much damage caused.

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