May Have To File A Lien On A Property, Looking For Some Advice

In my experience, filing a lien is the 'nuclear option' and really is only done after all avenues to get paid are gone.

First, contracts are important and so are written scopes of work, and you're feeling the burn of taking a shortcut here.  

Second, the contractor has a boss.  And presumably, that person has a boss or owner. And even that person answers to someone, or a building owner somewhere in the chain.

If you have a reasoned discussion with someone higher up and show up with your back-n-forth that shows you tried to make it right, it might be worth a few hours of your time if you stand to lose $12,000.

This sounds to me about like the equivalent of someone making you mad, so your first bit of retribution is to egg their house, then they make you mad again so you burn their house to the ground.

Now, with that said, my caveat: IANAL.

Without a signed contract, I think you are highly unlikely to get anywhere at all going that route.

Personally, I would find out who that contractor works for. If he works for himself, then the next answer is to go straight to the building owner where you did the work. Print a copy of all of the emails, write a nice letter, and hand-deliver it, fully expecting that you're not going to get to talk to anyone of any importance. If you do, even better, but be prepared as though you just have to leave the information behind. Document your trip and who you speak with.

Chances are, that'll rattle some cages good enough to move things from where they are. Even without a signed contract, work was done, and it was done to the specification that you promised in the timeline you promised (assuming you're telling the truth).

If it doesn't, just keep pressing the issue.

I just do not feel that you have any chance of a lien being successful without a contract, even with emails documenting it all.

My $0.02.

What state?  

In California it would be about 0%.  

The best you could do is small claims and a prayer for a lucky judge.

The lien is against the property, so the owner should have been notified with a preliminary notice.  Then there is a limited period to file the lien.

Also, failing to pull permits in some jurisdictions would be sufficient to avoid payment as would not being correctly licensed.

The rules change by state, but you might be better off walking away from the $12,000.00.

I don't play an attorney on the radio or television but I would research before diving in.

Good Morning UD1.  I had this very thing happen to me, also with a Fire system, almost the same circumstances.  I did have a contract, no signature, but email approval; so I did have a bit more than you have.  The GC refused to pay it saying it was the owner's responsibility.  He was acting just as the middle man.  He presented his bill to the owner without my system so he did not get paid for it by the owner.  

In my case, the owner wanted nothing to do with it.  They were unreasonable. 

In North Carolina, I don't have a clear legal path to the owner by State law.  So where you live is important. I had to contend with the GC.  I worked with him over the course of 14 months and he never made an effort to pay.  Not once.  Just empty promises.  

In month 15, I sued him. Step one was arbitration.  We all met at the lawyer's office.  This guy had the worst paperwork I have ever seen for his own job.  He did not have a contract for his work.  No job description, nothing.  He had a bill to the owner that did not include our work.  Even his own attorney knew he had no leg to stand on.  

After some conversation, and I stayed pretty quiet for once, we worked out an agreement where the owner paid 1/3, the GC paid 2/3.  His payments were spread out over 9 months.  

The caveat was that if he missed even one payment, he became responsible for all of it plus interest for 14 months (NC law) + legal fees. He also would be found in contempt of court.  The agreement was signed and filed.  He paid all of it.  The contempt conviction was the most important thing to me.  He could not get his Contractors license renewed with a conviction on his record.  He didn't know that and signed it anyway.

Your legal theory is "unjust enrichment" and you need to read up on that.  Even if a contractor makes an honest mistake, and you did not, consumers cannot just receive something of value without paying for it.  Check your local laws about your legal path to the owner, but, like UD2, I would also contact the owner with a nice letter of explanation (don't get your hopes up).  If that fails, be ready to sue the GC in small claims court (check your state for small claims threshold).  

From now on out, do everything without emotion, without malice and formally.  Don't make it personal, it is just business.  Send your communications registered mail, requesting signatures.  Stop initiating phone calls, and everything must be in writing.  Conversations mean nothing.  He is unreliable.  You two obviously had an agreement of some kind.  You performed work, and you would not have done that without some idea that you would get paid.  There was some sort of agreement.  Most judges are reasonable and smart.  They will figure it out, but they don't want to do your heavy lifting for you.  Prove your case to the best of your ability.  

All is not lost, but it will be a long haul.  It will require patience.    Good luck.

UD1 This sounds like you have spent $12K in education.  Hopefully you learn for this and don't do another bit of work for anyone without a signed contract in place.  I also have spent money the way you have in the education of hard knocks.  I did extensive research and hired the best (and often very expensive) construction lawyers to represent my company.  After our initial consultation, it was clear that my organization needed to be schooled on the legal collection process and the intricate lien laws for my state.  Based on that, my recommendation is DO NOT file a lien.  Specifically, you could find yourself on the paying end if you file an "fraudulent" lien.  This would allow the owner to go after you.  In court you would have to prove your case and it all comes down to paperwork.  Further, there are specific notices that must be sent at specific time intervals in order for you to file a legitimate lien.  Without certified proof that you sent these notices to ALL parties involved on the project you may not have a legal right to file a lien.  EVERYONE HERE SHOULD KNOW THE POWER OF THE PRE-LIEN NOTICE.  If you do not, I recommend that you contact a construction lawyer in your state and learn.  A Pre-lien notice has been one of the most beneficial instruments in keeping constant cash flow on AIA jobs.  It puts all parties on notice that you know the law and expect to be paid in a timely manner.  In order to properly notice all parties there is some information gathering that must be done on the front end.  If you are not collecting this information upfront, I highly recommend everyone to start.  You need to know the legal contact information for the electrical contractor (if you are sub to them), the general contractor, the architect, and the owner.  Your certified notices will go out to all of those parties each time.  

Just because you can't file a lien doesn't mean that it is end of the road for you.  Keep in mind that mechanic's liens expire.  So, if an owner doesn't respond to a lien you are still forced to file a lawsuit as the next step.  My recommendation would be to contact a construction attorney and have him send a demand letter to the owner and GC for services rendered.  This will show both parties that you are serious and ready to fight for your money.  You should get a response from that, however if you don't then the next step would be to file a lawsuit.  Just understand that the attorney's are on the clock and even if you have a strong valid case you may not always be entitled to attorney's fees.  It is not unreasonable to think you could spend more than $12k in attorneys fee to get a judgement that you would then have to try and collect.  Depending on the jurisdiction it could be completely up to the Judge or Jury if you even get that far.  Most courts today are pushing for or have enforced non-binding arbitration prior to trial to try and keep as many cases out of the crowded courts as possible.

So, after reading that last paragraph you as business owners or managers should be asking yourself why do we do what we do if we can't get paid.  Understand that the contracts that the general contractors are presenting to us today have millions of dollars of legal work behind them and are almost always 100% in their favor.  The general contractors are more organized as a group than we are and not only have industry lawyers but lobbyist.  One lesson my attorney's taught me is that it is possible that the general contractor agreement is so one sided it is could be illegal on invalid.  They call it an unconscionable contract.  The problem is everyone in our industry is so hungry to get a project that they often don't read the contracts and never mark them up with changes.  If we all were educated on contracts and we fought these terms we could make a change.  However, we all know there is a "chuck in a truck" or a "vic in a van" that will do the job and not even question the contract.  

A couple of other things we have seen recently that everyone should know is a couple of gotchas we are seeing:

• Recently added was the language that all terms and conditions between general contractor and owner are considered to be within and are enforceable upon subcontractor.  This is an issue because you haven't seen the contract between the owner and general contractor.  Now you have to ask for it.  Good luck getting it.  Recently when I asked I was denied and I used that as the basis to have that language removed.  Another time we got the contract between the owner and gc and found that they had liquidated damages of $12,000 per day.  Legally, if I would have signed that contract as is I would have been liable for those LDs should an issue have arose.  
• Also recently, we received a small two page contract from a major general contractor.  This was huge red flag for me.  They included a web address in the language of the contract and said all terms and conditions listed on that address were considered herein as part of the contract.  We went to the site and found 100s of pages of legal jargon as our new terms and conditions.  

UD1 you mentioned reaching out to Ken kirschenbaum to get his contracts and that is a great start.  As you dive into bigger construction contracts I recommend you meet with an expert in your state.  Ken's contracts are great for small business / resi and for recurring services.  For the installation portion and construction contracts there is some language there that after being properly educated we felt was missing.  We still use some of Ken's contracts ourselves for recurring services direct with the owner, but when it comes to EC and GC contracts we don't.

John Honovich this article points us to an area that your site could make a huge contribution to our industry.  It would be great to see some legal experts post regular articles on our industry and things that affect our business everyday.  If you could get some information about legal loopholes and one sided indemnifications, etc. it could benefit a lot of subscribers.  Also some financial experts would be great.  If you could have someone share the importance of knowing your true hourly overhead costs and how to calculate that information for example.  Job costing and post mortem analysis would also be beneficial.  Honestly, the financial piece is purely dedicated to my quest to never go up against another competitor who quotes $35 a hour labor and single digit margins.  The more we educate our industry the stronger we will be.      

http://bestlawfirms.usnews.com/construction-law

I can vouch for Peckar and Abramson and I can make an intro for you.

Someone in a CFO role would be good for accounting or a CPA firm.  A quick search revealed this company:  http://calvettiferguson.com/