A Contractor’s Right to Lien Real Property

Mechanic's Lien , , ,

If the homeowner fails to pay the contractor

California law gives every contractor and supplier the right to lien real property for labor and material they’ve incorporated into a property, but for which they haven’t been paid. For example, let’s say a homeowner hires a contractor to build a deck and the contractor then hires a subcontractor with employees to pour concrete footings for the project. If the homeowner fails to pay the contractor, that contractor can put a lien on the homeowner’s house. This sequence of events is logical and fair.

Seemingly less logical is the subcontractor’s ability to place a lien on the homeowner’s property. This can happen in a situation where the homeowner pays the contractor, but that same contractor fails to pay the subcontractor for the concrete work related to the project. Under law, a general contractor is not only the employer of its subcontractors, but also the subcontractor’s employees. The employees of the subcontractor may then seek redress from the homeowner instead of the contractor. Since the homeowner’s house is collateral against all transactions, it’s his house that gets a lien put against it. This is true even if the homeowner paid someone else for that labor and materials.

A homeowner could be legally responsible to pay the contractor twice

In a worst case scenario, a homeowner could be legally responsible to pay twice for labor and supplies. This could happen if a homeowner were to hire and, under the terms of the agreement, pay a general contractor for a project. If and when the contractor fails to pay his crew or his suppliers, the homeowner could be legally obligated to pay for the supplies and wages himself. A foreclosure on a lien could force him to sell his house to pay the debt. The homeowner could, of course sue for recovery of the losses the contractor.

Contracts quite often employ the use of progress payments. Prime or general contractors must in turn make progress payments to subcontractors within 10 days of receipt of the funds from the home owner unless there is a written modification to this rule. If the prime contractor fails to pay, he may be subject to a levy.

DiJulio Law Group
https://www.dijuliolawgroup.com

Mediation of Construction Disputes

Mediation , , ,

Mediation, An Alternative to Litigation and Arbitration

Mediation is an increasingly popular process for resolution of construction disputes for a variety of reasons. Resolving construction disputes with the usual methods of litigation and arbitration can prove costly in terms of time, money and emotional stress. Mediation provides an alternative for contractors, owners, developers, design professionals, and others who are dissatisfied with arbitration or litigation process as a means to resolve their construction disputes. In addition, experience has proven to many individuals that arbitration is not always a low-cost alternative to litigation in dispute resolution.

The process of mediation is one in which the mediator opens avenues of communication between the disputing parties. The mediator, without deciding the issues or imposing a solution on the parties, facilitates an understanding which allows the parties to reach a mutually agreeable resolution to their dispute. The mediator seeks to help the parties to reach an acceptable resolution based on their own ideas of what that resolution should be. A mediator does not pass judgment and so will not render an opinion as to the proper legal result of a particular dispute.

Mediation may be used in resolution of claims or conflicts between disputing parties at any point of the claim process. It can occur prior to the filing of a more formal court or arbitration process or prior to trial. Mediation allows for minimization of legal costs, a gain in control in the decision-making process, and a reduction of emotional stress. Business relationships suffer less damage because mediation provides the most rapid process for full and final resolution of disputes.

Mediation offers the possibility of a quick resolution

Disputes quite often have a negative impact on timely project completion, in addition to negative financial impact when costs accrue on a daily basis. The extensive legal preparation necessary for successful litigation tends to lead parties down a path that may not prove to be the most advantageous approach. Mediation gives disputing parties a voice in the process and also presents the possibility of a quick resolution, unlike waiting for court dates. If you find yourself in a construction dispute, mediation offers you and the other party, with or without your lawyers present, the opportunity to find solutions for problems more quickly than would happen in the courts or arbitration. In a fraction of the time and expense of litigation, mediation allows you and the other party with the help of an impartial mediator to gain control in the outcome and obtain a fair solution to your construction dispute.

DiJulio Law Group
https://www.dijuliolawgroup.com

The K-1 Visa: Bringing Your Intended Spouse to the U.S.

Immigration , , , , ,

The K-1 Visa, Also Known as Dual Intent Visa

A K-1 visa is the process by which a U.S. citizen may marry a foreigner and have that person legally reside in this country. Because there are two objectives for the visa, it is called a dual intent visa. The K-1 visa requires that the person entering the country marry his or her U.S. citizen petitioner within 90 days of entry. Once the couple marries, the foreign citizen can adjust status to become a lawful permanent resident of the United States and a Green Card holder.

The K-1 visa is legally classified as a non-immigrant visa, but usually includes important immigration benefits. Because of these immigration benefits it is often processed by the Immigrant Visa section of United States embassies and consulates worldwide. In the event that a K-1 visa holder does not marry his or her U.S. citizen petitioner within 90 days of entry, then he or she must depart the United States within 30 days.

K-1 Visa Filing process

The process is initiated when the U.S. citizen starts the K-1 filing process here in the U.S. The intended spouse is interviewed at the U.S. Consulate in their home country.  This procedure cannot be started with immigration offices outside the U.S.

The U.S. citizen petitioner must submit a variety of supporting documents when filing a K-1 petition for the intended spouse. The process is similar for the  potential spouse in their country of origin. They also need to undergo medical examinations as well as appear for interviews.

At many consulates case processing currently can take anywhere from 7 to 9 months for a well-prepared K-1 visa. Some applicants will be required to wait up to a year because the processing time is dependant on the number of applications the agency receives.

K-1 visas are not subject to priority dates like some other types of visas. K-1 visas are not limited in number and thousands of them are issued to the intended spouses of U.S. citizens every year.

The Customs and Immigration Service will review the Form I-129F that the U.S. citizens has filed and then forward the applications to the National Visa Center (NVC). NVC will take around one month to process these petitions. NVC will take more time to process these applications if additional supporting documents are required.

After the approval of the intended spouse’s visa applications, NVC will forward the applications to the U.S. Embassies or Consulates, in the home countries of the intended spouse. After verification the intended spouse, called the beneficiary, will be called for interviews.

K-1 visas will be issued after the consulates or embassies ensure that the beneficiary is eligible for a visa. Eligibility is based on the interview and  the supporting documents provided.  These visas will be valid for a 90 day period, before which the beneficiaries must get married to the petitioners in the United States.

The great majority of K-1 visas applied for are granted. In 2009, 95 percent of the K-1 visa applications were approved: out of 29,127 K-1 visas applied for, 27,678 were issued, and 1,449 refused, and 1,266 were waived/overcome.

DiJulio Law Group
https://www.dijuliolawgroup.com/

The Mechanic’s Lien: A Contractor’s Way To Secure Payment

Adverse Possesion , , ,

Placement of a Lien by an Unpaid Contractor

An unpaid contractor may place a mechanics lien or “hold” against your property as a way to collect for work performed. Subcontractors, laborers, or material suppliers, may also may place liens which are then recorded with the county recorder’s office. The use of a lien is a typical means used by contractors and subcontractors alike as a way to secure payment for labor performed or materials furnished. Liens allows for foreclosure action, forcing the sale of the property when they have not been paid.

Contractors may view construction liens as a more advantageous alternate to litigation when cost and the time involved are considered. Also, the fact that the lien attaches to the interest of the owner of the property, and the priority afforded to properly filed construction liens over prior mortgages or other encumbrances may be an advantage. The question of lien priority is dependent on several factors and is best addressed by a qualified real estate attorney.

A property may be the subject of a lien when the prime contractor or “direct contractor” has not paid subcontractors, laborers, or suppliers. Legally, the homeowner is ultimately responsible for payment – even if they already have paid the direct contractor.

A lien can result in a variety of problems

If the homeowner doesn’t pay the lien foreclosure may result. A court proceeding that employs judicial foreclosure sales (similar a to mortgage foreclosure) is how mechanic’s liens are enforced. The court must determine whether the requirements of the law have been met and, if so, the priority of the mechanic’s lien being foreclosed relative to the other liens or encumbrances on the title. Once that is determined, the court will order the property sold and the proceeds of the sale applied to the liens in the order of their priority.

You may have difficulty selling your home if there is a lien against it. Buyers often won’t buy the property unless the title is clear, meaning it has no liens. A contractor with a lien has the right to have your property sold in order to pay off the lien via a foreclosure sale. More commonly, instead of forcing a foreclosure sale, a contractor will wait until the property is sold.

This is because in many cases a mortgage was placed on the property before the contractor’s lien and so the mortgage must be paid off before any other liens are paid. If the contractor forecloses on the lien, they have to keep up the payments on the mortgage or lose the property.

In some instances a homeowner may sell the property and use part of the proceeds to pay off the lien.

DiJulio Law Group

https://www.dijuliolawgroup.com

Written Contracts for Home Improvement Projects

Real Estate Laws , , ,

Projects Over $500 Require  Written Contracts

In California, all residential home improvement contracts must be in writing for all home improvement projects over $500. A contract constitutes a legal agreement between two or more people and is strictly defined by California Business and Professions Code Section 7159. This written agreement is one of the most important communication tools for both the contractor and consumer. A well written contract will accurately define what is to be accomplished by the contractor and will prevent any misunderstandings about what a job will entail. Details of the contract should delineate how the work will be done, when it will be done, what materials will be used, and how much it will cost.

All home improvement contract and subsequent changes should be legible, easy to understand, and inform the consumer of their rights. Generally speaking, homeowners who enter into contracts with contractors to improve, remodel or repair their homes almost always have a right to cancel the contract, without any penalty or obligation, within three business days after signing the contract. The most common grounds for cancelling (rescinding) a contract are fraud, mistake, undue influence, breach of contract, illegality and unconscionability. If you are promised something verbally make sure that it is included in writing. Don’t sign anything until you understand the contract and agree to the terms.

Oral Home Improvement Contracts

There have been a few cases in California where oral home improvement contracts have been enforced by a court. These cases usually involve situations in which the contractor has performed all or substantially all of the work agreed upon. Parties contracting for the work refused to pay for it on the basis that there was no written contract as required by law. The courts usually uphold the position of the contractor in these cases and cite the sophistication of the persons contracting for the work as a factor.

DiJulio Law Group
https://www.dijuliolawgroup.com

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