Money Matters
MommyLiberty5013
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Mechanics Lien Notice?
Talk me off the ledge or tell me to hire an attorney! I'm freaking out.
We closed on this home on June 28th. Prior to us taking possession of it, the sellers of the property filed an insurance claim (at our request) due to significant hail damage on the roof, and had the roof replaced. This replacement was a result of our paying to have the roof inspected. DH and I agree to increase the sale price of the home by a few thousand dollars to compensate the sellers for the out of pocket expense of the insurance deductible. They paid a $4k insurance deductible and then their insurance company sent payment for the work to the roofing company to complete the job. The insurance adjuster did agree the roof needed to be replaced. The job was completed prior to us signing at closing. The job was done by a company DH and I selected after looking into their license and being sure they were an up-standing roofer. But while we selected the company and the color of shingles, the owner and their insurance company handled all the paperwork and payment.
We have paperwork from the roofing company about the warranties that got transferred to us as well as copies of the work permits and the inspection that was done as the work was being completed.
Fast forward to this morning (Saturday)...
The mail lady came to the door with a certified envelope requiring a signature to deliver. I had no reason not to, so I signed for it.
It contained two pages. Listing this property by address and PID, and mine and DH's names, it says it's a "notice." It's not a lien or a bill. It is written from a company called Lien Specialists Servces, Inc. (LSSI) and they are hired to act as an agent for another company called Forest Specialists, LLC. The latter company is a building and roofing materials supplier here in the Twin Cities. The letter seems to indicate that Forest hired LSSI to handle legal paperwork for them in the event that they (Forest) were not paid for their materials. The letter uses a lot of "if" and "may" language, specifically, "If Forest Services, LLC is not paid by your contractor, they can file a claim against your property for the price of the labor and the material." The letter further gives an amount of $8,000. Then it says, "Forest Specialities LLC may not file a lien if you paid your contractor in full before receiving this notice."
I looked into mechanics liens in MN and MN is a state in which businesses are required by law to provide property owners with what are called "pre lien notices," or simply called "notices," prior to filing liens against property. Both LSSI and Forest are legit businesses, so this is not a scam. And the letter further references the roofing company who did do the roof replacement on the home. Plus, if you are scamming somebody, you do not tend to send something in certified mail. At least, that would be highly unlikely.
In case you don't know what I am getting at...it appears by the sound of this letter, that our roofer received materials from Forest Services, and that Forest Services was not paid for the material. And, Forest Services can legally come after the end user of the materials (the home owner) to get payment.
I also looked up an attorney's site that provided all of the MN Mechanics Liens details and statutes. There are statutes of limitations on filing this sort of lien and giving notices.
So, I called our REA this morning. She seemed to think a document such as this is fairly standard and did not seem too worried. She thought it was most likely a notice informing us that these businesses have rights for payment and that the letter was advising us to be sure we have a mechanics lien wavier from the roofing business who did do the work.
In my conspiratorial mind, that sounds really nice to me, but WHY SEND IT CERTIFIED if it is just a friendly FYI you may want to be sure you have this paperwork?
Anyway, our REA asked me to check our home binder, a record she put together of important papers...inspection, receipts, etc.. We DO NOT have a copy of this mechanics lien waiver. We were not the owner of the home when the work was completed. The previous owners hopefully have a copy. The REA is reaching out to their REA to get a copy and our REA also called our roofer to get a copy.
I totally want to believe this is okay and this certified letter is simply a typically formality, but honestly, I am nervous. Because again, if it is a nice FYI you should have a copy of the lien waiver, why send it certified? Certified mail is used when you need to ensure a person received a "legal document."
I have a fear that this is a "pre lien notice" and since LSSI is an agent for Forest Services, they are not going to give away their position of trying to collect funds on their client's behalf. Why get a home owner all upset and cause a legal fight, if you can just pretend to play nice up until the statute of limitations expires?
Do any of you know about things like this? I realize you cannot give legal advice, but am I correct to worry or am I in a tizzy for no good reason?
If this is really something to worry about, wouldn't a cancelled check from the insurance agency to the roofing company back in June be proof enough that the roofing company was paid and that Forest has no recourse against the home owners?
We closed on this home on June 28th. Prior to us taking possession of it, the sellers of the property filed an insurance claim (at our request) due to significant hail damage on the roof, and had the roof replaced. This replacement was a result of our paying to have the roof inspected. DH and I agree to increase the sale price of the home by a few thousand dollars to compensate the sellers for the out of pocket expense of the insurance deductible. They paid a $4k insurance deductible and then their insurance company sent payment for the work to the roofing company to complete the job. The insurance adjuster did agree the roof needed to be replaced. The job was completed prior to us signing at closing. The job was done by a company DH and I selected after looking into their license and being sure they were an up-standing roofer. But while we selected the company and the color of shingles, the owner and their insurance company handled all the paperwork and payment.
We have paperwork from the roofing company about the warranties that got transferred to us as well as copies of the work permits and the inspection that was done as the work was being completed.
Fast forward to this morning (Saturday)...
The mail lady came to the door with a certified envelope requiring a signature to deliver. I had no reason not to, so I signed for it.
It contained two pages. Listing this property by address and PID, and mine and DH's names, it says it's a "notice." It's not a lien or a bill. It is written from a company called Lien Specialists Servces, Inc. (LSSI) and they are hired to act as an agent for another company called Forest Specialists, LLC. The latter company is a building and roofing materials supplier here in the Twin Cities. The letter seems to indicate that Forest hired LSSI to handle legal paperwork for them in the event that they (Forest) were not paid for their materials. The letter uses a lot of "if" and "may" language, specifically, "If Forest Services, LLC is not paid by your contractor, they can file a claim against your property for the price of the labor and the material." The letter further gives an amount of $8,000. Then it says, "Forest Specialities LLC may not file a lien if you paid your contractor in full before receiving this notice."
I looked into mechanics liens in MN and MN is a state in which businesses are required by law to provide property owners with what are called "pre lien notices," or simply called "notices," prior to filing liens against property. Both LSSI and Forest are legit businesses, so this is not a scam. And the letter further references the roofing company who did do the roof replacement on the home. Plus, if you are scamming somebody, you do not tend to send something in certified mail. At least, that would be highly unlikely.
In case you don't know what I am getting at...it appears by the sound of this letter, that our roofer received materials from Forest Services, and that Forest Services was not paid for the material. And, Forest Services can legally come after the end user of the materials (the home owner) to get payment.
I also looked up an attorney's site that provided all of the MN Mechanics Liens details and statutes. There are statutes of limitations on filing this sort of lien and giving notices.
So, I called our REA this morning. She seemed to think a document such as this is fairly standard and did not seem too worried. She thought it was most likely a notice informing us that these businesses have rights for payment and that the letter was advising us to be sure we have a mechanics lien wavier from the roofing business who did do the work.
In my conspiratorial mind, that sounds really nice to me, but WHY SEND IT CERTIFIED if it is just a friendly FYI you may want to be sure you have this paperwork?
Anyway, our REA asked me to check our home binder, a record she put together of important papers...inspection, receipts, etc.. We DO NOT have a copy of this mechanics lien waiver. We were not the owner of the home when the work was completed. The previous owners hopefully have a copy. The REA is reaching out to their REA to get a copy and our REA also called our roofer to get a copy.
I totally want to believe this is okay and this certified letter is simply a typically formality, but honestly, I am nervous. Because again, if it is a nice FYI you should have a copy of the lien waiver, why send it certified? Certified mail is used when you need to ensure a person received a "legal document."
I have a fear that this is a "pre lien notice" and since LSSI is an agent for Forest Services, they are not going to give away their position of trying to collect funds on their client's behalf. Why get a home owner all upset and cause a legal fight, if you can just pretend to play nice up until the statute of limitations expires?
Do any of you know about things like this? I realize you cannot give legal advice, but am I correct to worry or am I in a tizzy for no good reason?
If this is really something to worry about, wouldn't a cancelled check from the insurance agency to the roofing company back in June be proof enough that the roofing company was paid and that Forest has no recourse against the home owners?
Re: Mechanics Lien Notice?
This isn't my area at all, but my H actually practices in this area pretty frequently... So I asked him. Obviously there's no legal advice intended, and he's not familiar with MN.
He thinks that what probably happened is your roofing company subbed out some of the work and hasn't paid the sub yet. He says that very often collection agencies will contact the homeowners because their immediate reaction tends to be to call the contractor and basically go ballistic on them so that the subs get paid more quickly.
In other words, it mobilizes payment.
I wouldn't hire a lawyer just yet. There's really nothing actionable at this point anyway. Sit tight and gather your paperwork, etc. in case you get an official notice that a lien is being filed. You could also do what the letter intends for you to do and call your contractor and have words with him about what the heck he's doing. You could tell him you want it resolved or it will be reported to Angie's List, etc.... I bet that will get his butt in gear.
If you do get a lien notice, please try not to panic. Obviously it's not something you want to have to deal with, but big picture, it usually only becomes a huge issue if you are about to sell the house.
Also know that the "demand" amounts are super negotiable. My H has gotten liens released for pennies on the dollar, and when he is collecting on behalf of a client they usually will accept a much lower offer too just to keep their legal costs down. H once got a lien released just by offering to pay the filing fees, which I believe amounted to less than $100. True story.
**not legal advice.
I agree with the other PPs. I understand why that was an upsetting letter and I'd be annoyed by it also. But Forest is just trying to get their bill paid and, more than likely, the roofing contractor will eventually pay it...probably in the near future.
Like @hoffse suggested, I'd give a sternly worded call to the roofing contractor this week and tell them something to the effect of that you were very upset to have received this letter, you know they already got paid by previous owner/insurance company, and you expect them to remit a payment ASAP to their supplier. Ask when that check will be sent (or request proof if it already was). And follow up to make sure it was.
Even in a worst case scenario, a lien on a home generally doesn't mean anything until the house is sold/refinanced. And any payment received in full (or negotiated), at any time, removes the lien.
In another lifetime, I was the office manager for a tree care company and we occasionally put liens on homes for unpaid work. While I can't speak for other companies, we only did that as an absolute last resort.
The lien goes with the house, not who ordered the work/owned the house at the time. With that said...just for the others out there...liens against a home are one of the things title companies check for. But in this case, the work was done before closing, but a lien has not been entered yet (and hopefully, probably won't be).