Home Buying in 95835>Question Details

Mie, Home Buyer in Fremont, CA

I closed on a newly constructed home in Dec '08. Today in the mail I received a notification that a lien was

Asked by Mie, Fremont, CA Thu Feb 12, 2009

placed and recorded on my home on Jan. 30th because of a construction bill the builder did not pay. I am not sure if this is real, but the letter was certified and signature required. I am not sure what to do at this point. Does this really happen?

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I contacted title and they said this type of thing is covered under title insurance and that it will be taken care of. I'm going to wait for documentation and see what the next step is.

So far, I heard that the a few of the homes in my community have gotten notice, so the builder must be in a jam....they have a very good reputation too, so it must be financial hardship. Hope it will be taken care of soon.
1 vote Thank Flag Link Wed Feb 18, 2009
Dear Mie: Realtors are not entitled to provide legal advice regarding title or clouds on title. You need to contact two entities, your title company and your attorney. Your attorney can let you know the best way for you to proceed. Good luck.
Web Reference: http://SoldByErin.net
1 vote Thank Flag Link Fri Feb 13, 2009
Mie,

Everyone's already told you to contact your title company, so that's your first step. This is called a "mechanics lien" and they can get really tricky (I'm a real estate professor and agent).

Please let us know how it goes, and in the meantime, I'll be holding a good thought for you.

Tamara Dorris
tamara2@surewest.net
Web Reference: http://www.tamarad.com
1 vote Thank Flag Link Fri Feb 13, 2009
Mie,

Again, this is an issue you need to bring to the attention of your Title Company ASAP.
1 vote Thank Flag Link Fri Feb 13, 2009
Dear Mie,

Any time that a contractor does work on a home and does not get paid, they can record a claim (lien) against the property in order to collect the money owed to them. You should ask the title company that provided title insurance when you purchased the property to research the public records and see when the lien was recorded. They might be liable if the lien was recorded before you purchased the property and they didn't catch it. I'm not sure if they are liable for liens recorded after you purchase the property. The builder should have paid the contractor who did the work on your house; but if they are insolvent the contractor may be trying to collect from the new homeowners. If you don't get results from the title company or the builder you might want to seek legal advice from a real estate attorney. If the amount is small, a cheaper option might be small claims court.
1 vote Thank Flag Link Thu Feb 12, 2009
Mie, First thing I would contact the Title Company that insured the Title of your home. They should be responsible for clearing this lien from your title. If for some reason there is an exclusion or something that you missed when you read your title policy (that I don't think this could be the case but it happens some times)I would contact the builder of your home urging them to pay the lien and get a lien release. If all that does not work, I would contact a Real Estate Attorney to help you out with the problem. The lien must be real so you have to take care of it right away. Sorry for the nasty surprise.
1 vote Thank Flag Link Thu Feb 12, 2009
You need to contact the contractor view the situation, you could have a title issue not aware of this. Confer with attorney you would be able to sale home till that lien is clear. Contact title company who you closed with

Immediate action is required.

GREAT QUESTION
Web Reference: http://www.lynn911.com
1 vote Thank Flag Link Thu Feb 12, 2009
Other than this, has the builder acted honorably otherwise? Or have they given you reason to believe that they will not act honorably? If the builder has a good reputation, it might be an accounts payable error, or something that the builder can remedy at the builder's expense, without you having to pay money to hire a lawyer.

In case you subsequently have to hire a lawyer, write down all details of the conversation, perhaps even follow the conversation up with a summary letter to the person you speak to at the builders office, and keep a copy of your letter.

It might also be a good idea to check the website of the CSLB to see if the builder and the subcontractor or material supplier is in good standing with the state.

http://www2.cslb.ca.gov/OnlineServices/CheckLicense/LicenseR…

The CSLB has a web page on Understanding Mechanics Liens:

http://www.cslb.ca.gov/Consumers/LegalIssuesForConsumers/Mec…

Reading that page might save you some lawyer-on-the-clock time
0 votes Thank Flag Link Fri Feb 13, 2009
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
Everyone is right! Start with the Title Company and if you can’t get anywhere unfortunately you need to get some legal advice!

If you need a referral to a good real estate attorney, just let us know. I have one in your area that can assist you!

I am really sorry this happened!
0 votes Thank Flag Link Fri Feb 13, 2009
The title company is not responsible for liens that are filed after the issuance date of the insurance; however, that doesn't mean you should not contact the title company. You also don't know if the construction company has a right to file a lien against your home. Just because it did it doesn't mean it has a right.


There are a certain number of days under which a mechanic's lien can be filed. However, your escrow would not have closed without a Notice of Completion. Contractors in California can file a mechanic's lien within 90 days of last day work or within 30 days if Notice of Completion is filed. You may end up hiring a lawyer to get it released.
0 votes Thank Flag Link Fri Feb 13, 2009
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