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What are my rights? What can I do?

New MexicoLien PriorityMechanics Lien

I came into an agreement with a friend to remodel my house. I was going to put in a certain amount of money and he was going to put some as well. He is a licensed contractor but as friends, nothing was done in writing. Part of his contribution was, as a contractor, to do the work. I gave him a check for my first half and the other half I gave in cash. We had an argument because he wanted more money. He left and would not respond my calls nor my text messages. The house was destroyed in many ways and I hired people to come and do the work. Now, the workers he had brought in, and he should have paid to, are coming to me saying he did not pay them and want me to pay them. I have no money left and the are harassing me saying they will put a lien on the hose. Can you please advice me? I have never had problems with anybody before and feel very stressed.This is in Albuquerque, NM Thank you in advance! Sandra

1 reply

Sep 16, 2019
This is a tough situation. Under § 48-2-12 of New Mexico's mechanics lien statute, when a New Mexico contractor has been paid in full, that contractor will be responsible for the claims of their subcontractors and suppliers. However, if there's a dispute between the owner and that contractor, and if they part ways and payment has not been made in full, there may be an open question as to who is owed what. But again - to the extent that a contractor was paid but failed to pay their subs and suppliers, that contractor will generally be responsible. And, if the above applies and a legal dispute breaks out, that contractor would likely be responsible for the legal costs associated. Of course, note that regardless of who's ultimately responsible, and regardless of whether the resulting claim would be valid and enforceable, a claimant can actually file their lien claim and have it enter the property record. Recorders offices don't have the authority or the bandwidth to investigate each claim made. So, if a lien claim does get filed, the owner may need to work to have that lien claim removed from the project property. Potential next steps One option might be to make demands or even threats to the project's prime contractor. If they've failed to uphold their end of the deal and to pay their subs and suppliers, then the contractor could be legally liable - and informing the contractor that there will be legal consequences for their failure to make payments might help spur them into action. And, demanding that they make payments in full and/or that they return to the job might help. This can be especially effective when a demand letter is sent via attorney. Further, particularly when there's a licensed contractor performing the work, threatening to make a claim against them with the Regulation & Licensing Department might be effective. That department handles violations of the state's building code and, if the contractor walked off the job and didn't pay their subs or suppliers, they've likely violated the New Mexico building code. More on that here: New Mexico Licensing Investigations Enforcement. Another option might be to make a claim against the contractor's license bond. That's typically done along with making a complaint against a contractor with their licensing board. Generally, every licensed contractor will have to provide a surety bond whenever they apply for licensure. And, any time that a contractor acts in a way that's inconsistent with New Mexico's licensing requirements, a claim against the contractor's license bond might be an option. Yet another option might be to show the prospective lien claimants that their contractor was, in fact, paid in full. If they see the pay stub or other proof that payment has been made, those claimants may instead look to their contractor to make payment. Unfortunately, with such a complex dispute taking place, I'm not sure how much more insight I'll be able to provide here. Consulting with a local construction attorney would help to clear up what options may be available specifically for your situation, and they'll be able to provide you with advice on how best to proceed.
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