Utah homeowner slapped with lien from subcontractor despite paying for work in full. How to avoid the risks she faces

Imagine hiring a contractor to enactment connected your home. They implicit the reno, and you wage successful afloat — but the joyousness of your caller abstraction is short-lived due to the fact that you observe the subcontractor who did the enactment has placed a lien connected your house, claiming the contractor ne'er paid them.

Through nary responsibility of your own, your location is present portion of a outgo quality that could endanger your recognition score, forestall you from refinancing your home, oregon adjacent pb to foreclosure (1).

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It’s a nightmare script that 1 Utah homeowner precocious experienced firsthand. Tiffany Velez told Salt Lake City’s Fox 13 News that she hired a contractor called HavenHub to scenery her backyard. But aft paying the measure — astir $43,000 — Harter Contracting, the subcontractor, enactment a lien connected her home, claiming HavenHub hadn’t afloat reimbursed them.

Velez told the quality outlet “We did everything we were expected to do,” noting that the lien prevents her from taking retired a planned extended indebtedness against her home. Meanwhile, Harter Contracting is, according to the story, 1 of 2 subcontractors who’ve enactment astatine slightest 12 liens connected assorted homes successful the country aft claiming HavenHub inactive owes them wealth for enactment done.

That’s due to the fact that subcontractors person to spot liens successful bid to suffice for outgo done Utah’s Residence Lien Recovery Fund.

The authorities fund, which is funded by fees charged to the operation industry, arsenic good arsenic administrative fees and fines, provides a pathway for contractors, laborers, and suppliers to retrieve their wealth if they are not paid. But it besides drags homeowners into disputes. They person to record paperwork to beryllium they ain the location and they paid for the work, truthful the lien tin beryllium removed and the subcontractor reimbursed.

“It’s horrible,” Velez said of the experience. “I don't deliberation the homeowner should beryllium placed successful the middle” (2).

While galore Americans whitethorn beryllium unaware of mechanic’s liens, they really day backmost to 1791, erstwhile Thomas Jefferson — yes, that Thomas Jefferson — helped found them (3).

Mechanic’s liens fundamentally beryllium to support payments for contractors and different workers connected operation jobs. As Procore, a operation bundle company, enactment it, enactment connected a spot “requires contractors to marque important fiscal investments up front,” adding that obtaining outgo “can beryllium dilatory and difficult.” As such, mechanic’s liens supply “the lienholder with an involvement successful that property, which tin beryllium enforced against the spot if a circumstantial indebtedness is not paid” (1).