# Contract Lien Question



## Shellbuilder (May 14, 2006)

I would never sign a contract or a change order with just one of two parties. Most remodel customers have a few disagreements about the job at some point. Better to stay out of that with a dual signed contract agreement!


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## MattK (Apr 2, 2009)

Maybe...maybe not. What if they're live in signees like my wife and I were for 4 years before we finally got married? What if they're business associates buying for a flip? What if they're an un-married same sex couple or brother and sister? 

I recently did a 16k roof for a couple in their 70's living together as friends or whatever for 40+ years with different last names and everything...but both were probably on the deed. It's never cut and dry.


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## QCCI (Jan 28, 2013)

It does matter, they may have assets divided or placed in other entities, there are too many variables. The husband and wife thing does not apply to all states. I would make sure all owners of the property sign the contract.


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## Shellbuilder (May 14, 2006)

QCCI said:


> It does matter, they may have assets divided or placed in other entities, there are too many variables. The husband and wife thing does not apply to all states. I would make sure all owners of the property sign the contract.


I have this in my contract

_The owners warrant and represent that they are the owners in title of the property, and improvements thereon located at the specified job location, and/or they have authority to contract for, and desire the work described in this contract; and that they are willing to pay for such work._


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## CScalf (Dec 18, 2008)

just put a clause in the contract that states, the signature of one is binding of the other.


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## Shellbuilder (May 14, 2006)

Its pretty standard issue for me to have worked for military where one is deployed. I get a power of attorney signed for deployed spouse.


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## greg24k (May 19, 2007)

Shellbuilder said:


> I have this in my contract
> 
> _The owners warrant and represent that they are the owners in title of the property, and improvements thereon located at the specified job location, and/or they have authority to contract for, and desire the work described in this contract; and that they are willing to pay for such work._


You missing a few lines in your clause:

Social Security Number____________________
Signature ______________________________
Print Individual’s Name____________________
Dated_____________
Witness signature _____________________________
Print Witness Name_____________________________
Address__________________________________________
Dated__________


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## GCTony (Oct 26, 2012)

greg24k said:


> You missing a few lines in your clause:
> 
> Social Security Number____________________
> Signature ______________________________
> ...


I would never give out my SS number, especially to a contractor that I don't know well. How does having their SS # give you any power other than the intimidation/fear factor ? Anyone have any idea if it's even legal to ask for it?


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## MattK (Apr 2, 2009)

GCTony said:


> I would never give out my SS number, especially to a contractor that I don't know well. How does having their SS # give you any power other than the intimidation/fear factor ? Anyone have any idea if it's even legal to ask for it?


I have to agree, not only does it seem unnecessary but when prompted as to why I need it, I don't think I would have a great answer to give the HO, other than in case you fcuk me and I need it to help crush you in court.


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## greg24k (May 19, 2007)

greg24k said:


> You missing a few lines in your clause:
> 
> Social Security Number____________________
> Signature ______________________________
> ...


That was a sarcastic remark fellas... How much s*^t can you possibly add to a contract to make things more complicated. 

Even when I'm building a house for someone, and hundreds thousands of dollars involved, is no different then any other job I do which involves 5k... The payment schedule differs, other then that its all the same.

If you want to cover yourself, learn to break up payment schedules, so you not falling behind... if payments not current, you're not out anything and you don't worry about anything, job stops until the payments are current as per contract specification. 
The final payment is small and if everything is done right and they don't pay, it is a Breach of contract on theirs part and they're liable for the whole amount of contract...and pretty much this is when it becomes more about principles and punitive damages, then anything else, because you already got your money to begin with. Period.


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## RobertCDF (Aug 18, 2005)

greg24k said:


> If you want to cover yourself, learn to break up payment schedules, so you not falling behind... if payments not current, you're not out anything and you don't worry about anything, job stops until the payments are current as per contract specification.
> The final payment is small and if everything is done right and they don't pay, it is a Breach of contract on theirs part and they're liable for the whole amount of contract...and pretty much this is when it becomes more about principles and punitive damages, then anything else, because you already got your money to begin with. Period.


 Golden advice there, i learned a long time ago to split up the payment schedule, at any given time that money stops flowing, work stops and we can walk away and not be screwed.


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## killerdecks (Apr 18, 2008)

RobertCDF said:


> Golden advice there, i learned a long time ago to split up the payment schedule, at any given time that money stops flowing, work stops and we can walk away and not be screwed.


We do really good work and we never had a problem collecting.


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## Shellbuilder (May 14, 2006)

Shellbuilder said:


> I have this in my contract
> 
> _The owners warrant and represent that they are the owners in title of the property, and improvements thereon located at the specified job location, and/or they have authority to contract for, and desire the work described in this contract; and that they are willing to pay for such work._


I put this clause in the contracts when a 32 year old mammas boy signed a contract for a new deck and fence. Momma came by and saw my sign up and stopped the job, she owned the house. Good thing no work had started.


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## iggy (Mar 3, 2013)

I just get all the money up front:laughing:


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## thom (Nov 3, 2006)

Greg24 is right on about getting regular and small payments so there is little to no money outstanding, WHEN IT CAN BE DONE. It may not work in some instances. 

A lien is merely an on-the-record notice of a claim against the property. You must still file a lawsuit to collect. 

A lien may have value though. If the owner is unable to pay, the order lien are paid in a suit to recover damages is the order the liens were filed, but after property taxes. Typically there is a first-mortgage existing, front of the line, if there are any other liens (second mortgage) that were already filed, they go in front of you. 

Assuming the owner cannot pay, and you must sue to foreclose the lien, and you win, and the owner doesn't right then write you a check, the house gets auctioned by the court, generally on the courthouse steps. Any liens in front of yours remain intact. If anyone buys the house at the auction, they buy it subject to all liens prior to yours. 

At the auction, if the house sells for more than your lien, the remainder goes to subsequent liens. If the house sells for less than your lien, you get what you got, less the costs of foreclosure and auctioning and filing and transfer. 

Generally the only way to get anything at the auction is to buy it yourself. You must have the funds available to be a bidder. If you buy it, you now own it, subject to prior liens. 

I've been there, twice. 

One lien I filed, the IRS was behind me in line to lien the same property. That put me in front of their $1M+++ lien. There were many other liens filed. Turns out they were medicaid fraudsters, $15M+.


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## Shellbuilder (May 14, 2006)

The few times I've needed to deal with possibly placing a lien, I offered a note instead. The note removes the argument of defective construction. You dont want to be in court trying to collect with a lien in place and an "expert " witness is on the other side saying you screwed the job up. Your lien wont look too good to the judge at that point and your next move may be defending yourself against punitive damaged from disrupting finances and damaging your clients credit.


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## killerdecks (Apr 18, 2008)

All this suing business sure costs a lot of money. 
I had it put in my contract that any attorney fees resulting from this contract are the responsibilty of the nomeownwer.


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## Shellbuilder (May 14, 2006)

killerdecks said:


> All this suing business sure costs a lot of money.
> I had it put in my contract that any attorney fees resulting from this contract are the responsibilty of the nomeownwer.


Good luck with that.


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## killerdecks (Apr 18, 2008)

Shellbuilder said:


> Good luck with that.


I had my attorney word it for me. He was the one suggested it. It won't be luck it'll part of the contract that the people signed.


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## Shellbuilder (May 14, 2006)

killerdecks said:


> I had my attorney word it for me. He was the one suggested it. It won't be luck it'll part of the contract that the people signed.


Every contractor i know has that clause and yet to collect that money.


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