Can anyone give me advice with a fradulent mechanics lien?

[Arthur Boand]

Jurisdiction: Indiana

I signed a contract with a guy back in December. The contract stated that I would furnish $20k towards renovations to the house in my name. The work would be done within 60 days. In return he would recieve 30% of the sales price after home sells. (My contribution will be taken out of total plus home cost). After the first month he had jacked off all of my money. He no longer was able to finish the project. 8 months and an almost $20k later from my behalf, I got the home done myself with other contractors. He has been in and out over the past 8 months acting as if he has been contributing much knowing his percentage is on the line. The house is now listed for sale and he came out of no where and sent me a notice of intent for lien. ($65,000). I found out he is unlicensed, and was also broke the whole time. Never pulled permits like he should have and showed me a fake GC certificate. What do I need to do?

[Wayne Brooks]

A couple of different issues here....

State lien laws are Very specific in timelines that have to be followed for filing liens.  Read your state statutes.

Your “contract” with this guy is unclear.....it sounds you are the owner and this guy is the contractor?  Not sure what “I would contribute $20k to the renovation” means....you’re paying him $20k for a specific scope of work?

Much will depend on Exactly how your contract was worded, and documentation along the way.  I’m guessing you never properly terminated his contract for cause/breach of contract.

There are typically severe penalties for filing fraudulent liens and perhaps illegal contracting without a license issues.  Your fault though for getting fooled by a “fake gc Certificate”.

He may or may not file an actual lien....many scumbag “gc’s” try this threat. 

You will definitely need an attorney if he does file a lien.  Since you are apparently looking to resale quickly, this could be a major issue....which is what he is counting on.  If you were holding long term and didn’t need to sell/refi, there would be different strategies.