Peacock Tales

Volume 17, Number 3 · July 2007

Doing Home Improvements? Safe or Sorry?

by John A. Rodgers

This is the time of year when many people are doing home improvements, additions or remodeling. Unless you take precautions, what should be a happy experience may turn out to be frustrating or disappointing. Let us share a few legal tips with you on how to avoid an unpleasant home improvement experience.

First, as you select your contractor, ask for references and follow through by interviewing those listed, as well as any other customers that might be mentioned by those references. The best advertising for any service provider is a happy customer.

Second, before having any work started, you should have several papers in hand. A contract with a definite price should be signed between you and the contractor. An often overlooked item is insurance. Be sure that your contractor has liability and workers compensation insurance. Ask for a certificate of insurance, which the contractor can obtain from her or his insurance agent. If the contractor does not have insurance, and someone is injured during the work at your home, you, as the owner, could find yourself and your insurance company liable for the injuries.

Third, be wary of a contractor that asks for a substantial deposit or "up-front" money before any work is done. Most contractors have established credit lines at supply houses and do not need your money to buy supplies in advance. Too often, we find ourselves here at Peacock Keller representing disappointed homeowners who have advanced money to a contractor who either does not complete the work or does unsatisfactory work. Be safe. Instead, work out a schedule by which you pay your contractor in stages, as work progresses, with each payment being made for work already completed to your satisfaction.

Finally, there is a new Mechanics' Lien Law that went into effect in January of 2007 that gives increased protection for banks and lenders who often provide funds for home improvements, but that same law may increase the risks for the homeowner. For many years, Pennsylvania has had a "Mechanics' Lien Law" that provides a way for contractors and subcontractors to enforce payment by placing a "Mechanics' Lien" against the title to the home on which they have worked. Starting in January of 2007, the amendments to that law expanded the remedies available to contractors who have disputes with owners.

Now, not only can your primary contractor file a lien against your home, but also subcontractors and those who have supplied labor or materials to those subcontractors have the right to lien your home if they are not paid. Think of that! With both subcontractors and "subs" of subcontractors having the right to file yourself served with papers by a person or company you never heard of asserting a lien for payment for labor or materials indirectly delivered to your home. That all sounds like bad news, which it is.

But there is good news, if you know how to protect yourself. Under Pennsylvania's Mechanics' Lien Law, a "waiver" of liens can be drafted, signed by you and your contractor, and filed in the local courthouse for a nominal filing fee. Provided that such a "waiver of liens" is filed before any labor is done or any materials are delivered to your home, then neither your con- tractor, nor any subcontractor, or supplier can file a Mechanics' Lien against your home. In the case of a genuine dispute, they may have other remedies, but most other procedures give you, as the homeowner, a better opportunity to have your side of the situation heard in "your day in court."

Before you have any project done at your home, take precautions. Please feel free to contact any of the lawyers in the real estate section of Peacock Keller, who can help you protect yourself.