To file a lien in any court in New Mexico the person filing the lien does not have to prove they are a licensed contractor, had a legitimate contract with the person named in the lien, or are actually owned any monies let alone the amount claimed. The lien, once placed rightly or wrongly, clouds the title of the homeowner for two years making it next to impossible for them to refinance or sell without paying the sum named in the lien.
Removal of the lien before the two years requires going to court to prove they are innocent; a concept which runs counter of the belief that all men are innocent until proven guilty. When I sought legal advice as to the removal of a lien on my property by a contractor no longer licensed I was told to just pay him as the amount owed was less than the legal fees it would cost to go to court. This, in opinion, amounts to legalized blackmail.
A contractor can at any time within that two years move for judgment. And the homeowner can actually have their home foreclosed on and sold out from under them to settle lien even if it is a fraction of the worth of the house. The only recourse for the homeowner is to participate in a lengthy and costly legal action for which there seems to be no alternative or affordable path even if the lien was illegally placed, the contractor has no proof of the contract, or the amount owed. And until the matter is settled in court the title of the property is still clouded and the homeowner hog tied. In my instance the legal action took four and a half years. And extends beyond the license of the contractor or the legal standing of his now defunct company.
Regardless of the legal rightness of either side of the argument changes need to be made in New Mexico's Mechanic's lien laws to avoid the tying up of court time, the abuse by contractors, and the victimization of homeowners.
Other states have amended their mechanic lien laws to be more fair. But as the law currently stands in New Mexico it is merely a legalized form of black mail which damages everyone involved. I have lots of friends that have been a victim of the Mechanic's Lien and who, like me, would never, ever hire a contractor again. So this law damages the construction industry as well as homeowners and the real estate market. And the Construction Industries division does little to monitor this process and its abuse.
I would be more than happy to meet with any New Mexico legislator willing to take on this miscarriage of equal rights before the law and testify before any committee or answer any questions as to my personal experience with this abusive law.
Two required amendments based on my brief experience as an electrical contractor in state with a better, if more complicated, Mechanics Lien law. 1. A "Right to Lien" document with a legal description of the property, construction contract description (including maximum amount), and the signature(s) of the property owner(s) is needed in order to file a mechanic's lien. I routinely got such a document at the initial contract signing stage. I never had to file an actual lien. 2. A "Lien Release" signed by the contractor was frequently given to the property owner(s) as part of the final payment process. Some owners paid before they got the Lien Release, which is an automatic defense against a lien under the referenced construction contract.
ReplyDeleteThe whole process was a little more complicated, but not illogical. Complications involve a subcontractor's or material supplier's derivative right to lien (the subcontractor's right deriving from the general contractor's "Right to Lien" and similarly for a material supplier).
Of course, New Mexico legislators should study the law in other states and review their experience before amending the New Mexico law. I only mention these points here so that you could point them in the right direction, if you didn't already know about these aspects.
I too was an electrical contractor in the State of New Mexico. At one time you could lien the property before the work started. And when this little drama started I got my neighbor's address and walked a Mechanic's lien through and did not have to prove any thing to file it. I stopped short of doing so but just wanted to see.
ReplyDeleteYou give the contractor a legal description of the property and a plot when you contract with him to do the work. That is all he needs. The contractor that put the lien on my property did not even have to include "unpaid" invoices to lien. In fact one of the first things revealed in the court trial was that he was wrong about what I owed even by his reckoning. Nor is he required to go to arbitration which I offered to do several times during the process before trial because I knew at an absolute max I might owe him 1/5th of what he was claiming.
Nor is there like is some states a review of the documentation of the lien for it to process further. In Florida with very similar laws contractors are using the mechanics lien to get property they later resell because there like here my options were pay him or sign the property over to him. Or fight him and I was told by several lawyers that I should pay him because hiring a lawyer to fight him would be way more expensive. I qualified for legal aid but had I paid them it would have been $50,000.
That is INSANE!!!And obscene, and scary, and would be a reason to not move to New Mexico. Thank goodness it ended well for you, but you did not need that extra stress.
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