lien release after permit is closed

[David S.]

Apologies if this is in the wrong forum.  

We just completed the renovation of a 1700's era commercial historic building (property is in the National Register of Historic Places).  We're affordable housing developers, but took this project on as my partner lives in the area.  

On top of the usual challenges of working on a historic project such as this, the previous owners of the building had done a large amount of unpermitted work over the years, complicating things further.  To put it in the words of the appraiser, this project "[was] going to try a man's soul."  And it certainly did.

The property was formerly a ski/snowboard shop and was converted into a coffee shop/community association office/therapist office/travel agent office.  The electrician we hired certainly had his work cut out for him.  We worked very closely with the area's electrical inspector, trying to determine what could remain/have grandfathered in while bringing the place up to code.  Unfortunately, the electrician ended up being in over his head and performed a good deal of illegal and down right dangerous work.  Small fires, melted connections at the meter where temporary service was installed, undersizing of what was needed to power the coffee shop equipment, etc.  Eventually, with roughly 1/3 of the work still needing to be completed, he and his coworker stopped showing up.  We brought in the electrician that we should have used from the start to rework the project.  After viewing all of the work performed by the previous electrician, the new electrician told us he couldn't in good conscience not report the old electrician to the state.  

Now frankly, a lot of this is on us.  We should have done a better job of vetting this electrician.  We contacted his references on other commercial projects of his, and they checked all the right boxes.  We should have made the determination earlier on that he was out of his depth and pulled him from the job.  We should have been able to recognize earlier on that the work being performed was not adequate.  I take responsibility for that.   

My question is regarding the lien release from the electrician.  The electrician, after disappearing, sent us an email asking for not only the remainder of the contract to be paid, but an additional 10k in change orders.  I should say that we were well aware that the nature of this project was going to result in change orders.  The email was sent roughly a month ago and we have not heard anything from him.  We have prepared a response in conjunction with our lawyer.  

My concern is the fact that we do not have a lien release.  Our building department is telling us that because they closed out the permit attached to the old electrician, that we have nothing to work about, and the electrician cannot file a lien against the property.  Perhaps it is my ignorance, but I don't see how the permit being closed could possibly prevent him from legally filing a lien.  

I imagine many responses to my inquiry here will be to discuss the matter with our lawyer, and we are doing that.  However, I wanted to see if anyone has had a similar experience, and how they dealt with it, particularly as it pertains to the permit being closed out.  This is a new one for me.  We have been fortunate in that we have had nothing but good relationships with all of our GC's (when we use one) and our subs.  Sure, there have been hiccups, but a mutual trust and respect in/for each other allows us to always come to an amicable resolution.

Thank you in advance. 

[Wayne Brooks]

 Correct.....the permit being closed out has nothing to do with his lien rights. 
The first DIY thing you can do is read your state statutes for mechanics liens. There are Specific timelines he must follow to file a Timely lien/intent to lien. 

And if he does file a bogus lien, it is not the end of the  world. It could only prevent you from selling/refinancing until it was removed. Two ways to remove in most states:1) go to court, have it squashed 2) post a cash bond, usually 110-125% of the lien amount, this removes the lien from the property. If he doesn’t file suit to enforce the lien, the lien dies after 1 year or do in most states.