rox
Veteran Member
gemini,
You are right about laws being diffeent by state. i can tell you that in Wisconsin and Illinois a construction lien takes the first lien position against anybody else. The first contractor to file is the first lienholder, the second contractor the second and then after the construction liens would come the bank. It makes sense because the bank should not have an equity position in an object that has not yet been paid for. the construction and materials have not yet been paid for so those guys would come first. I was a Credit Manager for 7 years for a large company who had one division was was irrigation both materials and also installation, mainly for golf courses. All I would have to do would be to mention that if I wasn't paid on XX date I would file an "Intent to File a Lien" This would be the last approach because basically that customer is not going to buy from you again if you Lien his jobs. But I did it. I also went many times to the bank and gave my Lien Waiver directly to the bank officer in exchange for the check for the materials, and many times Labor and Materials if it was an installed job.
If I were 40 chicks I would find out the time limit on filing a lien. He may think he is getting a delay by going to the Contractors Board process, however that process is not going to stop the contractor to protect himself under the law and file his Lien within the time line. In Wisconsin it was 90 days from the last work, or a materials delivery. The filing of a Lien, or in Wisconsin even the Intent to File a Lien is going to make problems for him with his bank.
I am rather surprised that in Arkansas that a bank would have first lien postion before a contractor if the contractor never waived his Lien rights. e.g. Lien Waiver. Are you really sure about that?
As long as 40Chicks discloses to his bank, and is prepared to have a lien process started against his property while he is undergoing resolution with the Contractor Board I think that is the correct process if he believes that he has been overcharged in labor or materials. I point out that 40chiks thought that everything looked okay in thsoe 2 areas, he said he believed that the labor hours were right and the materials were right. So then what is the complaint? The complaint is that the estimate was a low ball estimate. However because of the time the workmen were on the job 40Chicks should have figured that out himself as the the number of hours was racking up at over $200 an hour and had this discussion early on, not after he has working lights and a fnished job. You wouldn't hire an attorney at $200 an hour and let him/her work and work and work for you say in your office right on yoru farm where you can see him every day for months on end, without somewhere getting an update form the attorney on what he is doing and when he will be done. The electrical workers were there every day 40 chicks knew and agreed to the rates, it was not a "Bid Job", it was time and materials and 40 chicks was certainly aware of the time being spent, regardless of the estimates, he knew (or should have known) what a big portion of the bill was going to be buy doign jsut simple math, and he agreed to it every day that the workers were on his property and he said nothing. the time to have the discussion was much earlier in the project, not after it is all installed. The contractor needs to make a profit as well, he is not going to stay in business or be able to feed his family if he doens't take a profit also. He worked a quarter of his year on your job, he wants his profit as well.
It will be interesting what the final outcome of this will be. I do have respect for you 40chicks I don't think you are out to deliberatly screw this guy. Just sharing a disiterested parties point fo view is all.
You are right about laws being diffeent by state. i can tell you that in Wisconsin and Illinois a construction lien takes the first lien position against anybody else. The first contractor to file is the first lienholder, the second contractor the second and then after the construction liens would come the bank. It makes sense because the bank should not have an equity position in an object that has not yet been paid for. the construction and materials have not yet been paid for so those guys would come first. I was a Credit Manager for 7 years for a large company who had one division was was irrigation both materials and also installation, mainly for golf courses. All I would have to do would be to mention that if I wasn't paid on XX date I would file an "Intent to File a Lien" This would be the last approach because basically that customer is not going to buy from you again if you Lien his jobs. But I did it. I also went many times to the bank and gave my Lien Waiver directly to the bank officer in exchange for the check for the materials, and many times Labor and Materials if it was an installed job.
If I were 40 chicks I would find out the time limit on filing a lien. He may think he is getting a delay by going to the Contractors Board process, however that process is not going to stop the contractor to protect himself under the law and file his Lien within the time line. In Wisconsin it was 90 days from the last work, or a materials delivery. The filing of a Lien, or in Wisconsin even the Intent to File a Lien is going to make problems for him with his bank.
I am rather surprised that in Arkansas that a bank would have first lien postion before a contractor if the contractor never waived his Lien rights. e.g. Lien Waiver. Are you really sure about that?
As long as 40Chicks discloses to his bank, and is prepared to have a lien process started against his property while he is undergoing resolution with the Contractor Board I think that is the correct process if he believes that he has been overcharged in labor or materials. I point out that 40chiks thought that everything looked okay in thsoe 2 areas, he said he believed that the labor hours were right and the materials were right. So then what is the complaint? The complaint is that the estimate was a low ball estimate. However because of the time the workmen were on the job 40Chicks should have figured that out himself as the the number of hours was racking up at over $200 an hour and had this discussion early on, not after he has working lights and a fnished job. You wouldn't hire an attorney at $200 an hour and let him/her work and work and work for you say in your office right on yoru farm where you can see him every day for months on end, without somewhere getting an update form the attorney on what he is doing and when he will be done. The electrical workers were there every day 40 chicks knew and agreed to the rates, it was not a "Bid Job", it was time and materials and 40 chicks was certainly aware of the time being spent, regardless of the estimates, he knew (or should have known) what a big portion of the bill was going to be buy doign jsut simple math, and he agreed to it every day that the workers were on his property and he said nothing. the time to have the discussion was much earlier in the project, not after it is all installed. The contractor needs to make a profit as well, he is not going to stay in business or be able to feed his family if he doens't take a profit also. He worked a quarter of his year on your job, he wants his profit as well.
It will be interesting what the final outcome of this will be. I do have respect for you 40chicks I don't think you are out to deliberatly screw this guy. Just sharing a disiterested parties point fo view is all.
