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posted: 7/4/2010 12:01 AM

Lien on property still exists even though owner settles dispute

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Q. A couple years ago I hired a guy to finish part of my basement. He did a lousy job and we ended up fighting over how much he should get paid. I paid him about half of what we originally agreed on and he ended up putting a lien on my property.

A few months later I tried to refinance and the lien messed me up. I contacted the guy who did the work on my basement; we worked out a settlement and I paid him.

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I now find out the lien is still on my house. I tried calling the guy but he is not returning my calls. What do I do now?

A. First, let's describe what you should have done and then we will examine your options. When you reached a settlement with the contractor, you should have insisted he prepare and execute a "Release of Lien." This document is then exchanged for your settlement payment. You then record the Release of Lien, which removes the original mechanics lien from your property.

Do you have any other documentation that evidences your settlement agreement? An e-mail? Did you write something to the effect of "paid in full" on the settlement check? Any other type of written agreement? If there is no documentation that your payment was an agreed settlement of your dispute, nothing prevents him from saying you continue to owe him the balance of the original contract (I am presuming you settled for something less than the original contract amount).

If you have documentation that your payment resolved your dispute, you may need to file a suit to quiet title in the county where the property is located (or the county where the contractor resides). You would present your evidence that the dispute was resolved and the court would order the contractor to execute the Release of Lien.

Also, keep in mind he is required to foreclose the lien (file a lawsuit) within two years of last performing work at your property. If you are getting close to that date, just wait. In the event he fails to timely foreclose the lien, the lien falls and no longer has any effect on your property.

Q. I have been sued by the couple that purchased my home about six months ago. The sewer line collapsed between the main line and the house and I guess it's going to cost them around $12,000 to repair. They say in their complaint that I was aware of the problem and failed to disclose the problem to them.

I was not aware of any problem with the sewer line. I never had a problem with the line and never paid anyone to fix anything with the sewer.

The attorneys I am talking to all want thousands of dollars to represent me, which I don't have. Do I have a chance in this lawsuit and are there any other options for me than paying someone thousands to defend me for something I didn't do?

A. The plaintiff has the burden of proof in any civil matter. In your case, the plaintiff must establish that 1) The problem existed when you owned the home, and 2) You were aware of the problem. Though proving the first element may not be very difficult, as you can usually find an expert to say just about anything, proving the second element will be trickier. Unless they can uncover evidence you were aware of the problem, they are unlikely to prevail. Such evidence could be prior repairs you made to the line, neighbors' testimony that you have had prior problems or evidence at the property that indicates previous issues with the sewer line.

As to the costs of representation, you could attempt to represent yourself. Some courts are better than others in adapting to clients representing themselves. Still, this is not the ideal way to proceed. Maybe you could find a young attorney who would represent you for a little less. It should not be a difficult case to defend, especially if there is no evidence you were aware of the problem.

• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine IL 60067, by e-mail to tdr100@hotmail.com or call (847) 359-8983.

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