Vail Daily column: Adjusting the balance of power
The legal system, as with many human institutions, has a strong tendency to favor the powerful: those rich, connected persons or megalithic corporations that always seem to emerge unscathed. True, there are those attorneys out there fighting the good fight and sticking it to the man on behalf of the downtrodden. I wish there were more. But, by and large, the little guy has a hard time, pouring their life savings into litigation in an effort to vindicate a position that even my three-year-old daughter knows is right. Yet there is one legal mechanism that can level the playing field if used correctly: the mechanic’s lien.
THE MECHANIC’S LIEN
Despite its moniker, the mechanic’s lien is not for automotive technicians. The mechanic’s lien statutes cover all manner of contractors, laborers, material suppliers and other persons who provide for the improvement of real property. While there are some national construction corporations that profit from the statutory protections, the largest swath of beneficiaries are the hardworking local carpenters, electricians, plumbers and other workers who have weathered a bad economy and many of whom live paycheck to paycheck. In contrast to a Wall Street titan, these are not people who can afford to write off a bad debt: Failing to be paid for work can mean kids going hungry.
WORKERS NEED TO BE PAID
Without the intervention of a mechanic’s lien claim, workers would be at the mercy of the owner and/or general contractor, often entities with the coffers to fund litigation and who know that the barrier to entry to a lawsuit can be cost prohibitive. A subcontractor who is thrilled to get a gig laying bricks for a palatial residence can soon turn despondent when the owner either fails or refuses to pay the $40,000 bill. Perhaps the owner fell victim to an overextension of capital or maybe the owner is trying to assert their assumed dominance. Rarer is a general contractor who, through mismanagement or spite, has no funds available to pay the subcontractors. Regardless of the reason, the mason has toiled for months and has collected no money.
Enter the mechanic’s lien. If the lien is properly recorded and the issues of priority are favorable and everything else goes well (these topics are complicated and outside the scope of this diatribe), the subcontractor wields enormous power. If a decree of foreclosure is granted by a court, then the subcontractor can force a sale of the $10 million property to satisfy the $40,000.00 claim. That is a potential outcome that certainly captures the attention of an owner.
GIVING A SMALL PLAYER SOME LEVERAGE
Certainly, it is not a perfect system. Simply recording a lien against a property does not immediately result in getting paid: in almost all cases a lawsuit must still be filed, unless an imminent sale or some other external event allows the lien to be paid off to allow the desired transaction to take place.
The mechanic’s lien statutes do not provide for recovery of attorney fees, so there is some investment that needs to be made in order to play the game. Moreover, the power given to contractors is counterweighted by the commensurate stringency of the statutes: One tiny mistake or delay and the entire lien claim can be lost.
Still, it is something: a recognition, however slight, that justice should work in everyone’s favor. The force of a lien claim can be just the right amount of ammunition to give a small player some leverage in negotiations at a large and intimidating table. That psychological benefit cannot be underestimated.
ABUSING THE LIEN
Unfortunately, even in a community filled with diligent and honest contractors, there are those unscrupulous elements that abuse the power of a mechanic’s lien. Armed with a mere modicum of knowledge about the lien process, they terrorize innocent homeowners, attempting to extort monies that were not rightfully earned.
To those looking to sell their home or refinance their mortgage, the specter of a lien is sufficient to force them to acquiesce to these untoward demands. Fortunately, due to ignorance of the process, which has harsh consequences, these bad actors often meet a deserved fate and lose their lien rights for one failing or another.
There are other areas in which the law grants outsized power to those in lower socioeconomic strata. The requirements for return of a tenant’s security deposit are one example. But, these should not be exceptions. Rather than being a bulwark protecting the assets of the rich, the legal system should be a wide boulevard able to be trod by all. Maybe I will live to see that.
T.J. Voboril is a partner at Reynolds, Kalamaya & Voboril LLC, a local law firm, and the owner and mediator at Voice Of Reason Dispute Resolution. For more information, contact Voboril at 970-306-6456, firstname.lastname@example.org or visit http://www.rkvlaw.com.