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tenant,hires contractor,can u lien?

alwaysoverbudget's picture

i have a building that a tenant has leased and is probably going broke before long[my guess ,as he owes me and several others rent] and he has started some major rehab work on the building and i would guess owes the contractor.


now can that contractor come back and put a lien on my property even though i have never ok'd the work or anything else? so far it's nothing like a furnace that the guy could come back and take out [i wouldn't have a problem with that ]this is mostly tearout and laying some sewer for a new bath. so  right now doesn't look like it would be a killer deal one way or another,but if work continues could get into the 75k range and i don't want to get hung with that.


i'm afraid if i would go to the contractor and say "hey make sure your getting paid" i might get into some liable type deal if he doesn't go belly up.


anyone been there ? larry


if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?

the older i get ,

the more people tick me off

(post #119518, reply #1 of 12)

I can only speak to ohio but the answer is yes

"this dog may be old but he ain't cold. And he still knows how to bury a bone."

Lattimore

 

www.rehmodeling.com

(post #119518, reply #4 of 12)

well so much for a good nights sleep!   not the answer to hear before you hit the hay. larry


if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?

the older i get ,

the more people tick me off

(post #119518, reply #2 of 12)

I don't believe that is is liable if you tell the truth.

Saying that you have not received the rent for x months is the truth.

.
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
. William the Geezer, the sequel to Billy the Kid - Shoe

(post #119518, reply #3 of 12)

You might be able to avoid being "involved" if you write to the contractor. Something like:


 "It has come to my notice you are working on the building at .............. I am the owner of this building and the building is leased to ................ All and any permanent changes to the building must be approved by my company. Please note we cannot be held responsible for any costs from non-approved work. We may, at our option, require non-approved changes to be removed.


But talk with your lawyer and read the lease contract to check.

(post #119518, reply #5 of 12)

when you started negociating with the person, did you find out if he was an owner or tenant? If tenant it is imperative you have something in writing from the owner to allow permanent additions/changes to the premises. If the owner ok's, the improvement is to his benefit, so he also should participate to some extend to the cost if the tenant does not come up with the money. Ultimately the tenant gets kicked out and the owner ends up with the benefit.
At this moment I would get legal advice appropriate for your area

(post #119518, reply #6 of 12)

i think you misunderstood where i'm at in the picture,i'm the owner,i have a tenant doing a remodel on a commecial building. as far as me benifiting from the remodel,not really when he moves i will probably have to gut it and go back to bare walls ,as his use is benifical to probabaly one in 10,000 people looking for a building.i'm just trying to figure out on top of losing rent,if i'm in line to pay for his work.


my common sense tells me i'm not,if i never approve/sign for something how can it be my deal. if i was a contractor getting ready to work on a building that my customer didn't own,i would think that payment up front or i don't start. but that idea don't mean squat if leagally they can file a lien. larry


if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?

the older i get ,

the more people tick me off

(post #119518, reply #7 of 12)

tough call, because the trade in any case wants to be protected.Liens are always filed against the property, essential against the owner. If you want the lien off you would have to pay the trade If it goes to court,keep in mind judges are not contractors. If he had a bad contractor he might rule in favor of the trade. If you are lucky he will order the "improvement" to be removed. Now who would pay for the removal? It becomes a vicious circle. All the judgements will not help you if you cannot collect.
My lawyer once said: remember we do not have a justice system, we have a legal system.
Any time it gets to court it gets messy.
If it was me: I would stop all activities on my property and order the trades to remove all "improvement". Saves you money to do it later yourself. Trades should have checked if it was proper to start the work in the first place. I run into this with Strata Counsels.
Where you aware what was going on?


Edited 1/21/2008 2:56 am ET by semar

(post #119518, reply #9 of 12)

my common sense tells me i'm not,if i never approve/sign for something how can it be my deal. if i was a contractor getting ready to work on a building that my customer didn't own,i would think that payment up front or i don't start. but that idea don't mean squat if leagally they can file a lien. larry


Lien laws vary a great deal from state to state, so you should consult a local lawyer. In at least some locations, if you "consent" to the work, you may be liable and consent doesn't necessarily mean you signed anything.  Once you see that the guy is doing the work, that may be consent.  To make things more complicated, in some cases the lien attaches only to the leasehold interest, not to the owner's interest.

(post #119518, reply #8 of 12)

Your question should have been addressed in your lease.

You need to talk to a lawyer in your locality fast.

Bob's next test date: 12/10/07

(post #119518, reply #10 of 12)

Doesn't your lease have language identifying who has responsibility and approval authority for maintenance, repairs, and/or "improvements" to the property?


I doubt if a lien could be enforced since the tenant doesn't have an ownership position in the property, but you may be giving tacit consent unless you get things documented.  You need to talk to your lawyer ASAP

(post #119518, reply #11 of 12)

There are a few points to consider; then maybe you can understand how the answers are reached.

The purpose of the lien is to ensure that the contractor or supplier gets paid. It's a fancy way of saying 'this building owes me money.'

Folks are exposed to liens all the time, without either their knowledge or consent. Neither is needed.
Here's a classic example. You hire someone to do your roof. The supply house delivers the shingles. The roofer goes broke. Even though you paid the roofer, and had no say in obtaining the shingles, the supply house can lien your house - with the end result that you get to buy those shingles all over again.
The solution? Require a 'lien waiver' from the supply house before you make the final payment to the contractor. You ask the contractor to provide such a waiver.

Ditto for work that a tenant has had performed. While the work may have been done on your building without your consent ... indeed, the lease may even state that maintenance is the tenants' responsibility ... it is your building, and therefore you, who benefit from the work.

Lien laws vary greatly in detail from place to place, and there are great differences in leasing laws for commercial or for residential purposes.

So. how can you limit your risks? Well, your lawyer can give you some more specific advice, but two ideas occur to me:
1) Evict him. Stop being Mr, Nice guy. I know one business that 'lost it's lease' after mounting ONE light on the outside of the building; and,
2) Ask the court to issue an injunction to stop work on the place.

(post #119518, reply #12 of 12)

If your lease allows tenants to enter contracts for improvements without your approval, Yes you are 100% liable.