Insist on proof of payment for supplies

Dear Bruce: We purchased a new home and had a sprinkler system put in the lawn. We paid the installer in full, by check. Two months later, we received a letter from the firm where this fellow had bought the sprinklers and supplies. He hadn’t paid, so they put a lien against our home for the sprinklers and supplies. Can they lawfully do this? We paid our bill. Why should we have to pay this fellow’s bill? – B.J., Crystal River, Fla.

Dear B.J.: This is a problem that so many folks simply don’t understand and, therefore, don’t take into account. If you hire someone to work on your home, and they use materials that are permanently installed without paying for them, the vendor, in most states and under most conditions, can file for a “mechanic’s lien” against your home until the bill is paid. You have little to worry about just now, except that this will be gathering interest. You will not be able to sell the house until the matter is straightened out. Your beef is with the guy who put in the sprinkler. It is very possible he will keep himself absolutely broke and judgment-proof. If that’s the case, unhappily, you’re stuck.

The only way to defend yourself: Insist upon a paid-in-full bill for all materials being installed in your home, prior to their installation.

Dear Bruce: I bought a house and paid cash. I recently purchased a shed and pulled the permit. When I went to the county, I did not see a small structure (20 feet by 25 feet) that is on my property. I was told I needed an engineer to draw up plans. So far this has cost me $1,800, and that does not include getting it up to code. I contacted my Realtor, and she said the title company didn’t check for permits because I purchased the house with cash and there was no bank loan. Should the title company have checked for this permit? And is the title company now responsible for the extra money I have had to pay? – A.H., Inverness, Fla.

Dear A.H.: You have made a very common error. Because you paid cash, you didn’t see any reason to dot the Is and cross the Ts. I have to believe that you were not represented by counsel, a clear mistake. Whether you had a survey done remains to be seen. You are the victim of your own ignorance or parsimony. The title company was hired to clear the title to you. It was your responsibility to have a survey, a search done of the property and purchase title insurance. It sounds like none of those things were done properly. I don’t think anyone else can be held responsible. You might have an axe to grind with the sellers, but whether you can find them is another matter. It has to be noted that the banks require certain investigations because they know it could put their loans in jeopardy. The fact that you paid cash only shifts that responsibility to you, and since you didn’t do those things, I think you are going to learn an expensive lesson. Readers, take note.

Dear Bruce: I have been a regular reader of your column and have learned a great deal. We are buying a condominium and plan to pay cash for it. You usually recommend having an attorney representing the buyer. We are buying directly from the developing company of this new 24-story building. Do we still need to use an attorney? – Reader, via e-mail

Dear Reader: Has a cat got whiskers? Of course you need an attorney! You are spending a substantial amount of money in a real transaction. Apart from the fact that you are paying cash, you will still be signing a number of documents and agreeing to terms the condominium association imposes, etc. For the tiny amount of money the attorney will cost, it is very much to your advantage as an insurance policy, if for nothing else. If something does go wrong, your recourse would be to take on the attorney, who undoubtedly has insurance.

Dear Bruce: Please tell me how to get a list of foreclosures from bankruptcy or other properties. I’ve called the credit union, and they don’t seem to have this information. I’m interested in purchasing these properties for rental purposes. – Reader, via e-mail

Dear Reader: Buying foreclosures is a very, very risky enterprise. The Department of Housing and Urban Development publishes lists of properties in your area that can be forwarded upon request. The classified section of the newspaper lists where foreclosure sales are to be held. If you are looking for investment property, why not take the traditional route and check with local real-estate brokers and agents, and drive through areas that you might be interested in? This might be a better way to go, especially if you are just starting out.

Bruce Williams is a national radio talk show host and syndicated columnist. He can be reached at bruce@brucewilliams.com.[[In-content Ad]]