Live in manager/maintenance threatening lien to prevent sale

[Jason Bilbrey]

Looking for some advice. I’m about two weeks away from closing on a 6-Plex and the seller just notified me that his live in manager/maintenance guy threatened to put a construction lien on the property. They have no written contract and he inherited the guy from the previous owner. The verbal agreement they had was the manager gets free rent for managing/maintaining the property including repairs, etc. I believe by trade he is a carpenter. Owner pays for all materials and manager provides labor.

My intention is to replace the manager with a paying tenant and manage the property myself. When the manager heard he was going to be evicted by me with a 30 day notice to quit he started threatening that he would put a construction lien to block the sale and also claiming he had a 6 month notice clause before he could be evicted.

As the buyer, should I delay closing until the seller clears this up, or will the legal issues stay with the seller and I won’t have to worry about it after sale.

Has anyone dealt with a situation like this (either as the seller or buyer)? What advice do you have?

[Wayne Brooks]

Well, I never would have given him notice prior to the sale.  In most states, he wouldn’t have have lien rights, his “payment” was the free rent.  Many actual contractors, this guy is not, threaten the “lien your property” like it’s some big club they have....it’s usually all empty threats and it is not hard to get am illegitimate lien removed. You want to see his contract/agreement though.

If he does actually file a lien prior to closing though, I wouldn’t have any issue closing with it as an exception to the title policy.  That may cause a problem with your lender though, but in most states the owner can place a cash bond, usually 125% or so of the lien amount, to remove the lien from the property until the issue is resolved.....hence the “I’ll lien your property and stop the sale” threat impotent.

BTW, I am a contractor and have filed multiple liens on property, legitimate ones, and have also squashed illegitimate liens filed by yahoo subs.