What are fraudulent liens?

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What are fraudulent liens?

On Behalf of | Aug 12, 2019 | Construction Litigation

Sometimes an Illinois contractor may perform work on a home or property but not receive compensation in a timely manner. This is why contractors file liens to get outstanding payments. But some contractors may file a lien that contains wrong information, or may be outright fraudulent. If you a lien is filed on your property that you believe is based on wrong information, you may have received a fraudulent lien.

Lienzone explains that fraudulent liens are the result of deliberate misrepresentation of a contractor’s work. The lien may exaggerate the amount that the homeowner owes the contractor. The lien may claim that money is owed for work that was never completed or for materials that the contractor had failed to supply. The person filling out the lien paperwork may also have acted so carelessly as to deliberately produce a false statement.

However, not all liens with incorrect information are considered fraudulent. Sometimes a contractor made an honest mistake, usually only a minimal error on the paperwork. Liens may not be considered fraudulent if the property owner and the contractor have a legitimate dispute over the amount the property owner owes the contractor. If a lien is valid save for innocent or small errors, the lien will typically stand up in court.

A contractor who deliberately files a fraudulent lien can end up in serious trouble in court. If a court discovers intentional fraud, such as including charges for work that do not qualify as part of the lien, not only would the lien be thrown out, but the contractor could also be held liable for penalties for filing a fraudulent lien. The contractor may also be held accountable for damages.

Be aware that some liens are contested in good faith, so even if you receive a lien on grounds that you do not agree with, the lien may still stand in court. Consider asking a construction litigation attorney for assistance if you feel you have received an intentionally fraudulent lien. Keep in mind that construction disputes take many forms, so only read this article for educational benefit and not as actionable legal counsel.

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