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Liens from contested home improvement projects are unnerving to many homeowners. They risk legal fees, poor credit ratings, and lose their ability to sell their home if the lien is not resolved. 

According to attorney Hans Huessy, there are steps homeowners can take to reduce the chances of contractors filing liens.  

Or, once a lien is filed, there are remedies to defend themselves. Huessy is chief counsel for the Home Service Store, a national home improvement service provider. 

Huessy says homeowners should require contractors and subcontractors to provide lien waivers as part of a written project contract. The contract should require a lien waiver be issued before payment for services. If payments are made to a general contractor in stages for work performed by subcontractors, the homeowner should ask for lien waivers from the various subcontractors as their part of the project is completed. 

Reputable contractors will have waiver forms readily available. If not, local or state consumer advocate organizations may have sample waivers. 

Homeowner diligence shouldn’t stop once lien waivers are signed. Huessy says homeowners should keep accurate records of what has been paid to contractors and who has worked on the job site and when.  

Such astute record keeping can help the homeowner ensure that he/she obtains lien waivers from all necessary parties. 

Unethical contractors sometimes file liens for false amounts, hoping to intimidate the homeowner into paying the disputed amount rather than spending the time and money to fight the lien. 

In most jurisdictions, liens expire after a set period of time so a homeowner may sit tight if the lien is not affecting their use of the property. 

If the lien disrupts use of their property, homeowners can counter a lien by posting the amount claimed with the court.  

This removes the lien from land records and frees up the homeowner’s property. This puts the ball back in the contractor’s court.  

The contractor has a limited amount of time to enforce the lien, often at great legal expense. If he fails to do so within the time period, the court returns the homeowner’s money. 

Huessy also advises homeowners to keep a watchful eye on change orders, the mid-job changes in materials that can drive budgets up. Those amounts should be itemized and figured into payments to contractors. 

In some cases homeowners may also request general contractors to post a performance bond. The bond is like an insurance policy to ensure contractors honor their contract, including obligations to pay all subcontractors and suppliers on time. 

The best defense against liens, says Huessy, is to avoid disputes early on. The best way is to clearly state expectations in a written contract before the project starts.  

On large projects, especially if subcontractors are involved, the contract should require the contractor to give the homeowner lien waivers signed by all subcontractors as they complete their work and before paying for the services. 

(The Home Service Store manages home maintenance, repair and improvement tasks in more than 130 markets nationwide and can be found at www.TrustHSS.com.)