Protecting Yourself Against Mechanics Liens

It happens in real estate sometimes when a situation arises and repairs need to be made on your home. But what happens as a homeowner when someone else agrees to be responsible for the cost of repairs whether it be a tenant or buyer? Is it as simple as a handshake anymore? Can we take their word at face value?

In a perfect world the responsible party should and would pay these immediately as agreed, but what happens if they don't?  Any prudent contractor protecting their right to be paid on services rendered would simply attach a mechanics lien to your property for the amount owed.  They can, and often times they will......unless you protect yourself.

Say your tenant has decided to add a deck to the home he is renting from you (hopefully with permission from you as the landlord). The tenant has agreed to pay the costs of construction of this deck. Construction begins. You may have even had an agreement in writing with your tenant regarding the responsibility for payment. Shall the tenant not perform as agreed the contractor will still want payment, and since the deck is on your property afterall the logical thing to do would be to come after you for the cost of repair. Thru small claims court you could get a judgement against the tenant who might pay you.....eventually. What a headache! And an unnecessary one!

With a few simple steps and minimal cost you could have avoided this scenario altogether! Here is how:

1. Fill out a "Notice of Non-Responsibility" form within 10 days of work being done that you haven't agreed to pay for. Make sure the form is filled out correctly it is signed and notorized by either yourself or your  authorized representative (your realtor or property manager.) Estimated cost $10. (NOTE: I WAS JUST AT THE PLACER COUNTY RECORDERS OFFICE FEB 4TH 2016 AND WAS TOLD THE NOTARY WASN'T NEEDED, I WOULD ADVISE TO CALL YOUR COUNTY RECORDERS OFFICE TO CONFIRM )
2. Make a copy and clearly post it on a noticeable place on the property. I would suggest an inside front window or even at the front door provided weather isn't a factor.
3. Within that same 10 day period take the original (notorized?) copy down to your local county recorders office for recording. Placer County charged me $18

And there you have it. Peace of mind.

You're Welcome.

As always if you have any questions about this or other real estate related topics feel free to contact me.

530.628.SOLD

Until next time,

Jennifer