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Bankruptcy, Mechanic's Leins, Failed Inspections--Suggestions?

Egret1986

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In September, our family "completed" a partial home remodel that began mid-June with a reputable local builder with great references, awards, insurance, good standing in the community, etc. We were aware that the electrical inspection had failed for a fairly minor item, but went ahead and paid the building contractor the final amount due, feeling comfortable that the electrical subcontractor would make the adjustments necessary to pass the city inspection. When that didn't happen, we called the builder and only got voice mail with no returned calls and our telephone numbers blocked to the project manager's cell phone. During the remodel, one of our air conditioning returns was altered and made smaller than the original. When we went to get our air ducts cleaned, it was indicated by them, as well as another HVAC company that not only did the return need to be out of the kitchen, but also that it was too small to be "code". Again we called the builder. On the same day we got this news, we also received a letter in the mail from a subcontractor that they had not been paid by the builder and if they did not receive payment would file a mechanic's lein against our property. My husband finally got in touch with the builder, who indicated that things had gone terribly wrong for him and that he had to file bankruptcy and that his company was no longer in operation. After that call, we found out that the gas and mechanical inspections had failed also. What the inspector indicated for the failure does not appear to be anything major. He was kind enough to call the subcontractor that did the work while he was at my home to indicate the failures and what needed to be done for the inspections to pass. He had the owner of this company on speaker phone so that I could hear the conversation. This subcontractor also indicated that he had not been paid and was also going to file a mechanic's lein.

Since we've never done a home remodel or dealt with builders, subcontractors or inspections; we're not sure how to proceed. We know that we need to get these items corrected in order to be compliant so that we can get these inspections completed.

Any suggestions? How do we find out who didn't get paid and may possibly be filing mechanic's leins against us? Should we file against this company's bankruptcy? Do we need a lawyer? We feel fortunate that our house was "completed" to the extent it was and are happy with the work (except for what has caused rejected inspections). :shrug:
 
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Icarus

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You need an attorney. You may have needed one when you signed the original contract.

When I remodeled my house in Florida, we had an attorney take care of the legal work with the contractor.

-Davd
 
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Egret1986

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Thank you for responding.

You're right, we should have sought an attorney prior to signing the contract. In the midst of the remodel, I believe my husband and I both realized that though we never directly spoke of it to one another and simply hoped for the best outcome. :eek:
 

mshatty

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Practical advice is that you will probably have to pay the subcontractors. Then they will be willing to do the corrective work to have your home pass inspection.

Next, you need to look into the builder's bankruptcy case to file a claim that will probably never be paid. But if you don't file one, you will never get anything. This is where you will need a bankruptcy attorney to assist you in finding out what is really going on in the bankruptcy case and how realistic it is that you will ever receiving anything from the case.
 

Pat H

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Where I live, what the builder did is criminal. He took money and failed to perform the necessary work. Contact your local police. I'm sure you're not the only one he ripped off.
 

Egret1986

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My husband talked to the subcontractor who did the gas work today...

Where I live, what the builder did is criminal. He took money and failed to perform the necessary work. Contact your local police. I'm sure you're not the only one he ripped off.
....there are seven folks that he did work for through this builder and didn't get paid for the work. He said one lady's house is just barely past the demolition stage and went on TV with a local news station (10 on Your Side) about her ordeal. I do feel blessed our house was completed except for the items mentioned. I just need to do some more digging and research on this and see what the best course of action is at this point. Right now I know of two subcontractors that didn't get paid, there could be more. If it was just the work needed to get things into compliance, then that's probably going to be less than a $1000, but the mechanic's leins could run into thousands. Thank you for the input.:)
 

Don

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You might also look into putting a lien on his house for the amount you paid him (as part of the bankrupcy claim) as well as the criminal charges.
 

mshatty

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You might also look into putting a lien on his house for the amount you paid him (as part of the bankrupcy claim) as well as the criminal charges.
THIS IS NOT GOOD ADVICE.!

If you attempt to put a lien on a bankruptcy debtor's property/house, you will violate the automatic stay that prevents all creditors from trying to collect their claims outside of bankruptcy court. With that violation, you become liable for damages, attorney fees and sanctions from the bankruptcy court.
 

Egret1986

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We're seeing our attorney on Friday.

Yes, there were others who got ripped off. In speaking to one of the subcontractors today, who plans to do the necessary work for the gas inspection to pass, he knows of at least one other subcontractor (drywall) who wasn't paid. That person did their work in July, so I wonder if anyone was paid now at all. Not knowing what to expect or how bad things really might be is half the nightmare, so hopefully after the lawyer visit on Friday, we'll at least know what we're up against.:bawl: I've been doing a lot of laying in bed the last week and a half trying to sleep this off, I guess. Let me put this computer down and head to the gym, and get back to the business of living since the extra sleep hasn't made it go away.:hi:
 

Icarus

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Hey, it's not worth loosing sleep over. Let your attorney do the worrying for you.

Let us know how it works out.

-David
 

Egret1986

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You're right, worrying won't solve anything.

Believe me, I haven't lost any sleep. I'm getting too much sleep. Back from the gym and I'm feeling more positive already! :cheer: I guess I was wallowing in a bit of self-pity and I may stumble again before I see this through to the end, but right now it's "get over yourself and move forward and do what you need to do!" There's worse things; lots worse!:)
 

Egret1986

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Update: We saw our lawyer today and feel a lot better about things.

Since the contractor was paid in full for all work and the sub-contractors were hired by the contractor, we were told we were in the clear and the sub-contractors can't legitimately file liens against our home. That's not to say that this won't happen. However, they wouldn't have case if they took us to court. If they file a lien and don't take us to court, then the liens would become null and void after six months. The sub-contractors have options for filing against the bankruptcy and bringing criminal charges since we paid the contractor for the work and he accepted that money, but failed to pay them(larceny). As far as the work that needs to be completed to pass the city inspections, we're going to get that taken care of on our own, get the inspections passed and move on. The lawyer indicated we could file against the contractor's bankruptcy and when it is dissolved (maybe not riight word), then a judgement could be issued against him in order to recoup our costs for the required work and any possible issues with the work that might crop up in the future. "Knowledge is power." Now we have it and feel tons better.
 

somerville

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Sounds like you have a payment defense that not all states recognize. It is always a good idea when paying a contractor to require him to provide you lien waivers from from all the subs who have performed work up to the time of any payment to the contractor. That is the best way to protect your self.
 

DG001

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I agree with Somerville - we had a similar situation when we had some work done on our basement. The sub-contractor wrote a letter, but did not actually file a claim.

Some research on the internet showed that our state laws do allow the subcontractor to sue us - but only if they had written to let us know that they would be sub-contracting before the work started. The sub-contractor did not follow up after that one letter, but it was a big lesson learned for us - now we know to get lien-wavers before making a payment.
 
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