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Real Estate Law

Mar 18
3
Indiana Home Improvement Act

Indiana Home Improvement Act

By | Contractor Law, Real Estate Law | No Comments

Indiana Home Improvement ActHomeowners in Indiana are protected from unscrupulous contractors by a consumer protection statute called the Indiana Home Improvement Act. The statute can be found at I.C. 24-5-11-1. While this statute is designed to protect homeowners, it can be difficult to read and comprehend. One of the more confusing aspects of this statute is that it does not tell the consumer what to do if the contractor they are working with violates the statute. In order for the consumer to take action under the Indiana Home Improvement Act, they must apply Indiana’s Deceptive Practice Act.

Indiana Home Improvement Act

Indiana’s Deceptive Practice Act, which can be found at I.C. 24-5-0.5-1 prohibits many commonly used business practices which are deemed unfair to consumers. Indiana’s Deceptive Practice Act specifically lists violations of Indiana’s Home Improvement Act as being a deceptive practice act. The two acts must be read carefully and followed precisely in order for a consumer to secure the protections both statutes were designed to provide. Unfortunately for most consumers they either don’t know about the protections of these statutes, or they fail to understand how to use them. Consumers and even attorneys who fail to properly apply the law may lose out on some very helpful features hidden in the confusing language of those statutes. Consumers would be well advised to hire an attorney with experience in handling matters that fall under these statutes. If you have had a problem with contractors regarding faulty fire pit additions that have been installed an attorney that is skilled in mechanic liens is advised.

One of the key advantages consumers may gain by properly following these two consumer protection statutes is the right to recover their attorney fees, if they hire a lawyer to enforce their rights. This is a very important advantage in disputes with contractors, because generally litigants in civil lawsuits do not have the right to recover their attorney fees, unless they have a contract which gives them that right or a statute that provides for that specific type of recovery. Since contractors rarely write provisions into their contracts that give homeowners the right to recover their attorney fees, the Indiana Deceptive Practice Act does just that. Having the right to recover attorney fees is a huge advantage in any dispute and that fact can make all the difference where consumers are simply engaged in pre-litigation settlement discussions, and quite obviously after litigation begins.

If you have a dispute with your contractor, be sure to hire a lawyer who knows how to use these statutes to your advantage.

Feb 05
2

Indiana Mechanic Lien For Residential Real Estate

By | Mechanic's Lien, Real Estate Law | No Comments

INDIANA MECHANIC LIEN FOR RESIDENTIAL REAL ESTATE

Anyone who deals with the construction or remodeling of a new home in Indiana should have a basic understanding of Indiana’s mechanic lien law. When contractors, suppliers, or equipment rental companies provide labor, material or equipment for the construction or improvement of a residential property, they may have lien rights. If they do not get paid, they may file a lien against the property. The filing of a lien against any real estate will in most cases prevent the owner from selling or refinancing their home, and it may also be construed as a breach of the terms of a promissory note and mortgage on the property. Consequently, a properly filed mechanic lien can be a powerful tool for a contractor, supplier or equipment rental company to collect money due them for the project.

The actual filing of a mechanic lien requires the contractor, supplier or equipment rental company prepare and record duplicate copies of a written notice to the owners of the property that they intend to hold a lien on the owner(s)’ real estate. According to the Indiana Mechanic Lien statute, the holder of the lien must provide a written notice to the owners which contains the name and address of the lien holder, the amount of the lien, the last date labor, materials or services were provided to the job site, a statement that the lien is being filed within 60 days of the last date labor, services, or equipment was provided to the job site, a brief description of the labor, materials or services provided. The notice must be signed and notarized and recorded with the county recorder in the county where the property is located. The recording of the notice must be technically accurate and timely filed, or the lien may be invalid. Real estate attorneys are generally very well equipped to make sure the liens are perfected, which is to say filed in accordance with Indiana law.

Once a Indiana mechanic lien for residential real estate is perfected, the holder of the lien has one year in which to file a lawsuit to foreclose on the lien. Failure to file a lawsuit within the one year period, will cause the lien to become void and unenforceable. If the holder of the lien fails to foreclose on the lien before the one year expiration date, he or she may still have the right to sue the general contractor or the property owner under a theory of breach of contract or unjust enrichment, but unless there is a contract that gives them the right to recover attorney fees, they will not be able to recover attorney fees, as they might when suing to foreclose on a mechanic lien.

Contractors who work under other contractors rather than the property owners must record a “Pre-Lien Notice” with the county recorder’s office within 60 days of the first day they provided labor, materials or services to the job site. Failure to record and send the owners a copy of the pre-lien notice will invalidate any subsequently filed mechanic lien on a residential property. The purpose of this notice is to give the property owner sufficient notice that someone other than the contractor they contracted with is working on their home and may ultimately file a lien on the property, if they are not paid. By having notice of the identity and the scope of the work being performed by subcontractors, the homeowner can take steps to insure the subcontractors are properly paid and, accordingly, no liens are filed. Obtaining lien releases or putting every contractor’s name on the check may help guard against the filing of a mechanic lien.

If the contractor contracts directly with the homeowner then no pre-lien notice is required. However, the lien notice on a residential property must be recorded within 60 days of the last day labor, material or equipment was provided to the website, whether a pre-lien notice is required or not. For commercial projects, no pre-lien notice is ever required and the lien notice must be filed within 90 days of the last date labor, materials or equipment was provided to the job site.

This article is a general overview of Indiana’s mechanic lien statute (sometimes referred to as Indiana’s Mechanic’s Lien Statute). There are many technicalities to the statute and property owners and contractors would be well advised to hire a qualified real estate lawyer to assist them where a mechanic lien is an issue.

For more information on mechanic lien resolution recording and enforcement see our real estate page.

Jan 04
2

Indiana Mechanic’s Lien Statute

By | Mechanic's Lien, Real Estate Law | No Comments

Indiana Mechanic’s Lien Statute

NUANCES OF INDIANA’S PRE-LIEN NOTICE REQUIREMENTS

FOUND WITHIN THE INDIANA MECHANIC’S LIEN STATUTE

Indiana, like most states, has enacted a mechanic lien law designed to help insure those who provide labor, material and services on construction projects get paid. The statute found at I.C. 32-28-3-1 through I.C. 32-28-3-18 seeks to protect the contractor rather than the consumer. However, like any good sword, it has a sharp edge that can cut both ways.

This article provides a brief description of some of the appellate cases in Indiana that help shape the landscape of the Indiana Mechanic’s Lien Statute law within the state. These rulings help define the meaning of the words and establish boundaries for applying Indiana’s mechanic lien laws.

NEW CONTRACT-NEW RULES:

Where a “no-lien” contract was signed by the property owner and the general contractor, and the contract was recorded within 5 days, as required by the Indiana mechanic lien statute, neither the general contractor nor the sub-contractors working under it had any legal right to file a pre-lien notice or a lien notice. However, despite that fact, a sub-contractor, who was initially barred from filing a lien, was entitled to file a lien and was not required to record and give a pre-lien notice when he later contracted directly with the property owners after the general contractor walked off the job. Feitler v. Springfield Enterprises, Inc. ,981 N.E.2d 155 (Ind.App. 2013).

AN OWNER IS AN OWNER UNLESS:

Other cases have wrestled with meaning of the term “owner” within Indiana’s mechanic lien statute. In the Shackelford case, the Court determined that the contractor (Shackelford) properly perfected his lien by serving a pre-lien notice on the builder, who was the owner of record since there was no recorded evidence of the identity or address of the intended buyer of the house.

Shackelford v. Rise, 659 N.E.2d 1142 (Ind.App. 1996).

Conversely, in the Mid America case, the court held Mid America’s lien invalid even though they served the owner of record with a pre-lien notice. The Court in the Mid America case held that although Mid America followed the precise language of the mechanic lien notice statute by serving the owners of record at the time the notice was recorded, Mid America’s strict reliance upon the statute essentially frustrated the purpose of the statute by giving notice to a party who would have no interest in it. They had no interest in it because they had sold the property to the Horns and Mid America knew that was the case and failed to serve the new buyers. Consequently, the Court in the Mid America case, held Mid America failed to perfect its lien rights with the recording of the “technically correct” pre-lien notice.

For contractors, the take away should be send a notice to anyone they know or suspect to be an “owner” whether they are buying or selling.

WHAT’S IN A NAME?

In the Von Tobel case, the Court held that where the lien holder’s name on a pre-lien notice is sufficiently similar to that of the name on the actual lien notice as to apprise the property owner that the claimant has a lien for materials furnished, the lien should be perfected and validated. In that particular case the name on the pre-lien notice was from Von Toble Lumber & Home Center, Inc.” and the lien notice from Von Tobel Corporation.” The former being a wholly owned subsidiary of the later.

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