Is it just me, or has there been an explosion of construction liens for excessive amounts? Most construction companies are honest, but a few aren’t. Apparently, the white-hot construction market here has led a few construction companies to file construction liens against property owners for completely excessive amounts. (Like $150 for a $6 tube of caulking. Seriously.) I have had numerous clients contact me recently who have had construction liens filed against them for completely unreasonable amounts. Is there anything that can be done about this? There is good news.
But first, what is a construction lien? Basically, it’s a lien a construction company can file against your property for unpaid amounts owed for the work they did. It’s like a mortgage; the construction company can foreclose on your property. Construction liens are huge clubs construction companies can use against property owners to get paid.
Given the tremendous leverage a construction lien gives them, some construction companies have apparently been filing liens for completely ridiculous amounts. Panicked clients call me and ask if there is anything that can be done. Fortunately, the answer is “Yes.”
First of all, the Montana Consumer Protection Act outlaws “unfair or deceptive acts of practices.” MCA 30-14-103. Charging $150 for a $6 tube of caulking and then filing a lien against your property certainly qualifies. The Consumer Protection levels the playing field by providing property owners a club of their own: triple damages and attorney’s fees. MCA 33-14-133.
Second, the construction lien statute allows a lien only for the “contract price.” MCA 71-3-526. However, in a break for property owners, the term “contract price” is defined to be the price agreed to or, if there is no set amount (as is often the case), then the “contract price” is the “reasonable value” of the work done. MCA 71-3-522. This limits the amount of the lien and should prevent a $150 charges for a $6 tube of caulk. A property owner can go to court to obtain a declaratory judgment from a judge on what the “reasonable value” of the work is and thereby set the amount of the lien. It’s best not to try a declaratory judgment lawsuit on your own. It’s better to have an attorney experienced in construction liens take the case.
(This information is of a general nature; exceptions to these general statements might exist. This information is for general educational purposes only; no attorney-client relationship with Overstreet Law Group, LLC is formed unless a person enters into a written representation agreement with the firm.)