Failure To Request Home Builder To Provide Lien Waivers From All Outfits Who Worked On Home Or Supplied Construction Materials Before Making Final Payment Leaves Homebuyer Holding The Bag On $150K+ In Mechanics' Liens From Stiffed Subcontractors

In Sioux Falls, South Dakota, the Argus Leader reports:

• Lynne Buus built her dream home through Daniels Construction, Inc. that year, but the dream dissipated quickly.
  
  Within months of her December 2008 closing, Buus was holding well over $150,000 in mechanic’s liens on the $519,000 home, effectively pushing the price to $669,000. The subcontractors hadn’t been paid.
  
  Buus sued Daniels Construction, Inc. and Jim Daniels personally, but she didn’t follow through. Daniels and his company were in no position to pay, her lawyer said, and a legal battle could run into six figures.
  
  The debt-laden company stopped filing annual reports as a South Dakota corporation in 2010 and officially dissolved through the Secretary of State in 2015.
  
  “I had to pay it all,” Buus said.
  
  ***
  Buus had alleged that Daniels closed on the home knowing that the subcontractors hadn’t been paid. Making the case against Daniels Construction was one part , but proving that Daniels – who had employees who handled various tasks for the company – was personally aware of the issues wouldn’t have been as simple as a case against the company.
  
  If she’d won, lawyer Tom Nicholson said, there was no assurance that the liens would be paid if other creditors had their own claims.
  
  “She was between a rock and a hard place. She could have spent a bunch of money to get a fraud judgment – which was not a foregone conclusion – then she’d have had to stand in line,” Nicholson said.
  
  The prospect of spending that money without the promise of a return made Buus’ mind up for her. She and her husband decided to focus their time and finances elsewhere.
  
  “We’re just peons,” Buus said. “We have to pay our own bills.”
  
  Jon Van Patten, a professor at the University of South Dakota School of Law, said disputes of this nature are relatively common. A contractor can't waive a lien from a subcontractor.
  
  “When the contractor brings you the bill, you have to say ‘bring me the lien waivers,’” Van Patten said.
  
  Without those waivers, the subcontractors are free to come to the property owner with the liens.

For more, see Homeowner says builder ducked out of unpaid bills.