Free legal advice?

Had some concrete walkways that were heavily slanted removed. New ones to be poured and stamped to appear as brick. Contractor gave a price we agreed to, then, over a three wee period where we dealt with bad weather he suggested some 'upgrades'...the first was "a great idea that won't cost any extra", the second was "cool feature that only be a little more".

Weather co-operates finally, and the concrete gets poured, and brush finished instead of stamped because one of the ideas was to add rock to the top. I ask him, 'where are we in regards to price?", says he "oh, um, about $400 more than the estimate; sounds fine, we're getting more than we originally wanted. He calls me from Lowes the next day to pick out rock...I look at the prices of the rock and start doing mental math, ask "how much more is this going to cost?"...

Half an hour later he walks to my truck and says "$2600"...MORE?!? I say, yesterday we were talking about $400. "Yeah, the rock is expensive, and the fill dirt that we'll need...blah, blah, blah. To which I respond, no. We're done, finish, today, and go away. He'd had a deal with my neighbor but had started upselling him before the demo was complete, so he fired him early on.

He finished the two small ramps, I wasn't happy with the results, but wanted him gone, so I paid him. Flash forward two weeks and I get a letter from the concrete company, he didn't pay them. The letter threatens a lien unless I pay them for the concrete and/or don't finish paying him.

I feel bad that they are out the money, but the copy of the order they sent clearly shows COD. He has since left town, of course, and we found another customer/victim a block away that is out $40k with only the demo done on a really big remodel.

So...where do I stand? Am I still on the hook to the concrete company?

How much is the concrete company saying is owed?  If it's not too much you may just pay to make everything go away.  Maybe offer to pay half just since they should know to have collected their money up front.

Whose name is on the order?

They may just be hoping they scare you enough that you’ll pay so they don’t lose money on their mistake  

i would start by looking to see who placed the order and signed for delivery.

Then make  a call to the state attorney generals office.  Head it off as quickly as possible by finding out if you really have any obligation before they take any action. 

KyAllroad (Jeremy) said:

How much is the concrete company saying is owed?  If it's not too much you may just pay to make everything go away.  Maybe offer to pay half just since they should know to have collected their money up front.

That's not how it works in the material supply industry, unfortunately. If they don't spot the guy as a gypsy, they will usually extend credit and this is a thing that can legitimately happen. The contractor had a contract with you, they had a contract with him. If he disappears, they'll come after you.

My wife's in the industry and specializes in contracts. She's been on both the supplier and contractor side of this sort of thing. I'll talk to her tonight and see what she has to say. 

Same thing happened to me, $6500 worth of concrete that I had to pay for twice. Lesson learned is that I won't hire anyone who won't let me pay the subs or for materials directly. 

One of the things that happens here is that pretty much any sub who sends labor or materials into a place sends the owner a letter informing them that if the contractor doesn't pay them, they have a right to file a lien. To the best of my knowledge this is true (here).

Which means nothing to you except that it's plausible that you are on the hook with the concrete people regardless of the contractor's malfeasance and that you did nothing wrong.

If I had a question like this in my locality, I'd probably turn to the city's building/development/permitting office to see if they had pertinent info.

Last year I had to get a new roof, $25k. 

Before I paid the final invoice I asked for lien releases from all subs and the roof tile company. Until I had that I would not release the final payment. 

So I spoke to my wife and showed her the original, as this is her wheelhouse. She does contract admin for a materials supply company, including concrete.

If you didn't get a lien release, you're probably screwed. It's no big deal for the concrete company to put a lien on the house - no big deal for them, anyhow. And since you're the homeowner, it's your responsibility.

I can't see how it was shipped COD, though, as the driver wouldn't have dropped the concrete until he was paid. More likely it was on account for your contractor and he's skipped town.

Janel had a bunch of suggestions on how to avoid this problem in the first place, but they're not really going to help now. Lien release was the big one. She says it's amazing how much effort people will put into not having to pay for something even as they're ordering the material.

Keith Tanner said:

So I spoke to my wife and showed her the original, as this is her wheelhouse. She does contract admin for a materials supply company, including concrete.

If you didn't get a lien release, you're probably screwed. It's no big deal for the concrete company to put a lien on the house - no big deal for them, anyhow. And since you're the homeowner, it's your responsibility.

I can't see how it was shipped COD, though, as the driver wouldn't have dropped the concrete until he was paid. More likely it was on account for your contractor and he's skipped town.

Janel had a bunch of suggestions on how to avoid this problem in the first place, but they're not really going to help now. Lien release was the big one. She says it's amazing how much effort people will put into not having to pay for something even as they're ordering the material.

Keith, would you mind posting the "bunch of suggestions", other than the lien release?

How can they put a lien on the house when they had no contract with him? That’s like saying I’m responsible if my neighbor gets his car repossessed since we share a driveway. 

They dropped materials without getting paid, that’s on them. They extended the wrong guy credit, the homeowner has noting to do with it. 

Steve_Jones said:

How can they put a lien on the house when they had no contract with him? That’s like saying I’m responsible if my neighbor gets his car repossessed since we share a driveway. 

They dropped materials without getting paid, that’s on them. They extended the wrong guy credit, the homeowner has noting to do with it. 

The problem is he has the concrete on his property. That concrete it technically the property of the concrete company as they have not been paid. With out getting in to details the reason the law is this way is because it is not returnable and the OP is getting use out of it. Additionally less than ohnest contractors that were willing to work with other less than ohnest GCs could lottery scam suppliers out of materials and build things and then dissolve the subcontractor company leaving the supplier with out recourse and the GC in possession of the materials that they use to build an even bigger profit. In effect they get free materials to build stuff and then sell. To stop this laws were made to protect the materials suppliers allowing them recourse against those in possession of there materials. Mostly because they are getting the use of and value from those materials  

A lien is a big deal to banks and anyone that may have a current of future financial interest in the property and its owner.  

Dean's got it. The person who ends up with the benefit is the one who's ultimately responsible for paying. Since quantities are not always exact until the job is done - excavating a concrete pad 5" deep instead of 4" means a 20% material overrun - it's not that unusual for there to be credit involved.

The number of people trying to scam material supply companies and the number of small contractors running on a shoestring make this a difficult thing for the supply companies. It scales up, too, they have trouble with larger contractors doing the same tapdance. She spends a lot of time scrutinizing contracts to make sure there isn't a loophole that will let someone get away without paying because, as Dean said, this stuff isn't recoverable. Well, not easily. I know there's been a couple of times where she's threatened to repossess a driveway or part of a parking lot to make a point.

For anyone getting into this, Janel's suggestions were: check references for your contractor. You want someone who's been around for a while and is well established with happy customers. It's tempting to go with the cheap guy who's new in town but these are the guys who are most likely to cut and run. The whole "we have a bit of leftover asphalt in the back of the truck" trick? Hell no.
Withhold final payment until the work is done and all paperwork is clear. This should not be a surprise, as it's exactly what the state/county/federal contracts do.
She may have said something about bonding as well, I'll have to double-check with her on this one. Not that you'll expect a bond on a homeowner job but if the contractor can be bonded that's a big step.
Get a lien release. Get a lien release. Get a lien release.

Keith Tanner said:

Get a lien release. Get a lien release. Get a lien release.

I understand this, but when you hire a contractor, how do you know "who" to get a lien release from?  If the guy you hired is willing to take the money and run, what's to stop them from producing whatever (fake) paper that looks legit to get that money handed over.  This is just something that has bothered me as it seems like pretty much anyone can show up and slap a lien on your home, even suppliers you never knew existed.  I'm actually surprised more fraud doesn't happen on the lien side of the equation, although I'm sure it does happen.  This is assuming a lien can be placed without a court judgment, which I have read conflicting things on.

(not) WilD (Matt) said:

Keith Tanner said:

Get a lien release. Get a lien release. Get a lien release.

I understand this, but when you hire a contractor, how do you know "who" to get a lien release from?  If the guy you hired is willing to take the money and run, what's to stop them from producing whatever (fake) paper that looks legit to get that money handed over.  This is just something that has bothered me as it seems like pretty much anyone can show up and slap a lien on your home, even suppliers you never knew existed.  I'm actually surprised more fraud doesn't happen on the lien side of the equation, although I'm sure it does happen.  This is assuming a lien can be placed without a court judgment, which I have read conflicting things on.

+1 to this. The one experience I have with liens on a home was when my dad was purchasing a foreclosed house. The homeowner was John Smith. John Smith then put the home in teh name of "John Smith, LLC". Then John Smith (the person) put a lien on the property for $70k for a garage that he'd put up. Well, obviously that isn't cool, but it kept the sale from going through for an entire year. 

You get the lien release from the same guy who's signing the contract to do the work. You have a contract, right? That should probably be on the list too. Get it all in writing - scope of the work, costs, timeline, payment schedule. Verbal agreements aren't worth the paper they're written on. 

I'll ask Janel about the details of potential misrepresentation tonight, but from what I've heard over the years that's not been all that much of an issue. She did tell me about one guy skating on paying because his credit application was with Company 1, who were then purchased by Company 2 and started doing business under that name. They do have a lawyer on staff who can write scary letters, which is an advantage that homeowners do not have.

The notion that someone whom I've never had any interaction with can place a lien on my house is baffling to me.

The contractor is working as your representative. You have hired him/her to do a job and bring in whatever resources are required on your behalf. This is what general contractors do.

I do not believe that a lien release from the contractor will do you any good if the material provider comes looking for payment. You'll need to get a lien release from the material provider. Without that, the provider hasn't signed anything away as far as lien rights.

That's exactly what a lien release is for, a signed statement from the contractor that he is responsible for any outstanding costs. The material provider will then go after the contractor as the homeowner is not liable.

The homeowner may not know who the contractor has been doing business with. It might be a concrete supplier, it might be Home Depot, it might be a traffic control company. The lien release means that the contractor assumes all liability for these bills and it is a legal document. This is SOP in the construction industry.

I'm not a layer, but that doesn't sound right... the contracter isn't able to "release" a third party lien.  All he could release is his own claim against your property.  The only thing I can convince myself of here is that this system is broken and unsalvageable...

He's not releasing it, he's legally taking responsibility. At least that's my understanding after talking to someone who does this for a living on a massive scale. Imagine the fuss if you don't get paid for a $20 million airport job because a subcontractor didn't give you a lien release and the striping guy has put a lien on the project. 

Keith Tanner said:

That's exactly what a lien release is for, a signed statement from the contractor that he is responsible for any outstanding costs. The material provider will then go after the contractor as the homeowner is not liable.

The homeowner may not know who the contractor has been doing business with. It might be a concrete supplier, it might be Home Depot, it might be a traffic control company. The lien release means that the contractor assumes all liability for these bills and it is a legal document. This is SOP in the construction industry.

OK, that makes sense. But if the contractor goes belly up, then what good does him taking responsibility for it do? The supplier still isn't paid, and can still go after you. They can't be held to a document signed by two third parties.

I don't think that would be called a lien release in that case.  I think that would simply be  a seperate contract in which the "contractor" agrees to pay any and all material supliers and cover the cost of releasing any lien should it arise.  I don't think there is any likely sceneario where a piece of paper (signed by two other partys!) is going to compel a material supplier to go after a contractor (especially one who has skipped town).  They want their money and they are going to go after the money.  In this case, the money is the original poster's home.  The part I question, is whether they can do that without an actual contract with the homeowner.  I don't think most people consider a contractor their "representative", nor are they granting him the power to enter contacts with other third parties on their behalf.   I guess if that's the state of things, the first step of any home improvement project is to hire an attorny to assist you in the contractor contract.  (this is all absurd)

I think you might have it backwards.  The contractor might be empowered as a representative of the supplier in the case you describe.  In that case, he could deliver a lien release on the behalf of himself and the supplier he represents once he is paid in full.

I think the recourse of the homeowner is the same in either case.  You pay off the material supplier and then sue the contractor.

Going belly up means it's bankruptcy court time, and the supplier has to deal with that. I believe that the basics of a lien release are "I have been paid for all costs incurred so any bills are my problem". The contractor is now officially the intermediary. You have proof that you paid.

Of course, there's a reason there are so many lawyers enjoying stable careers. I am not one of them.

Keith Tanner said:

The contractor is working as your representative. You have hired him/her to do a job and bring in whatever resources are required on your behalf. This is what general contractors do.

I have also hired him to pay the people required to do the job. If I have to sign individual contracts with every person he uses then I am the contractor and he is unnecessary. If he has the power to obligate me to payment and doesn't have the obligation to pay them when I pay him, then he is less than useless.