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This is so frustrating! I don't see how these contractors can legally come after me for Neumann Homes debts!
Mechanic Lien laws throughout the country are to protect those who did their work and did not get paid - obviously. In your case, these contractors, for whatever reason, did not get paid and are protecting themselves
Now, let me assure you that FREQUENTLY mechanics liens are filed (they have to be within statutory time periods to be enforceable) and then they are released - sometimes, such as in your situation, the General Contractor files BK - the Sub-Contractors file as Creditors in the Courts, and the Court approves payment of the Subs from whatever assets the General has.
While sounding complicated and I know scarery, it is actually quite normal - SOP (standard operating procedure) -
It sounds like you are doing all the right things - you should be just fine in the end.
Relax and have a cup of coffee and a "lo cal" donut!
I'm reading through my Schedule B exceptions from coverage in my title insurance policy. The one thing I see that concerns me is (4) Any lein, or right to a lein, for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by the public records...This is so frustrating! I don't see how these contractors can legally come after me for Neumann Homes debts!
Well, get to the lawyer. Obviously Neuman Homes was not honest in completing the affidavit. If they had paid all materialmen and mechanics you wouldn't be getting lien filing notices.
The Schedule B exception will present some problems. You see, liens arise upon delivery of material and performance of services. In many jurisdictions the lien does not have to be filed [or "perfected"] for a period of time - maybe 90 to 160 days depending upon where you are. The reason for that is to protect suppliers and laborers without the need for them to file a lien claim immediately on every job. In the normal course of things they get paid within the indicated period, their lien claim vanishes upon payment, and nothing gets filed. If they don't get paid, then to protect themselves they have to file the lien and give appropriate notice.
Yes, it's unfair that you paid Neuman but Neuman didn't pay its suppliers and the lien now becomes your problem. It's not fair for the suppliers to not get paid as well.
Most transactions on new construction require lien waivers from all materialmen and mechanics. That's a document signed by the supplier or laborer stating they've been paid in full. Apparently no on required lien waivers prior to closing your sale. It's surprising your mortgage lender didn't require lien waivers as a precondition to loan closing.
It appears a few corners may have been cut in your transaction - AGAIN get legal counsel and get them working on this. Like I said before - liens have a tendency to get worse rather than better! So don't delay.
In 40 years in the RE business, I have NEVER advised against an owner's policy - NEVER. Nor, have I EVER heard anyone else doing so either .
I didn't mean to suggest that most Realtors do, but I have been a Realtor and also a RE closer for a title company and have heard a number of Realtors say that. I think that is one of the many things that separates the GOOD realtors from the bad ones. And good Realtors are worth their weight in gold. As are good RE attorneys.
Could it be these contractors did get paid by Neumann and are trying to pull a fast one because of the bankruptcy?
I have no idea, but I have heard that most of the people who purchased Neumann Homes in the 6 months or so prior to the bankruptcy announcement are now getting liens. So I'm guessing most of these contractors probably haven't been paid, or else there are a lot of dishonest contractors out there. Most people have multiple liens. We have 2 so far.
I am wondering if you have visited with your Title Insurance Company to talk with them?
Show them all of your lien documents. If you have already done this, then you should not have a concern about the liens unless they flat - out refuse to answer. If so, your next door way is for your own attorney contract / retention.
Why pump up all of your uncertainty when a face to face appointment would answer your Title Insurance questions fast enough? You don't need an attorney to do that part.
I am starting to come full circle regarding the desperate Neumann Home situation. I don't blame you at all, but I am losing the perspective of what you have done and what you have not.
I am wondering if you have visited with your Title Insurance Company to talk with them?
Show them all of your lien documents. If you have already done this, then you should not have a concern about the liens unless they flat - out refuse to answer. If so, your next door way is for your own attorney contract / retention.
Why pump up all of your uncertainty when a face to face appointment would answer your Title Insurance questions fast enough? You don't need an attorney to do that part.
I am starting to come full circle regarding the desperate Neumann Home situation. I don't blame you at all, but I am losing the perspective of what you have done and what you have not.
Best Regards,
Carter Glass
Before we received any liens my husband called Chicago Title to ask them if liens were covered, and whoever he spoke to told him yes and to send any we get to them. We were hearing about a lot of Neumann customers receiving liens and figured we were at high risk of getting them since we closed on our home a month before the bankruptcy was announced. Now we received 2 liens this week, so I took them into Chicago Title in person. The girl I spoke to didn't give me too much info, she just handed me a form to fill out with instructions on where to mail it to. So I'm assuming we will be covered but it is making me nervous since we keep hearing conflicting reports from different people. A good friend of mine is a legal secretary for a real estate attorney that we use for our real estate transactions. I called her and asked her to speak to the attorney and see what he thinks, and if we should hire him to get on this. We haven't heard back from my friend yet. So hopefully all will turn out fine, but it is nervewrecking all the same.
Also, Chicago Title is the main title insurance company Neumann uses, so I'm sure they are getting bombarded with claims now. That makes me worry that they will try and find a loophole to get out of covering them. And I'm just a worrier by nature.
As my opinion... "YES" - - You bet - - the title company will try to squirrel out of this Neumann Homes Bankruptcy. If they don't, it is possible that they will become the next bankruptcy in this chain of events. Are they a Limited Liability Corporation (LLC)? I don't know.
For a moment, consider such a chain reaction that the Neumann Homes Default has / will cause.
And so that is the reason why every corporation involved is slow and reluctant to help. At the moment, they are trying to figure out how to eliminate or reduce their liability.
So it is very possible that 'they' are talking to the attorney that you want. If that is the case, then there is conflict of interest and your chosen attorney won't accept 'you' as a client. After all, representing a corporation will bring in more financial gain for 'X' attorney....
So, as a past example / comparison, look at past insurance companies involved with Katrina. One or the other or both of the main insurance companies found loop holes in the Katrina catastrophe when people started claiming flood damages.
Because of this huge Neumann mess that will become worse with time, in my opinion, your very safest position is to hire an attorney like previously mentioned. The attorney that you initially contacted is trying to figure out whether such a massive potential law suit is in 'his favor'. I.E. a good financial position for him.
So if you don't hear soon from your chosen attorney, then talk to another one. And soon.
I know it is mundane to say, "Have a very nice day"... but try to have an inward smile through all of this, anyway.
After all, consider the position that Ken Neumann drags on his shouders, at the moment.
I sincerely belive that Ken Neumann is an honest man and that he was building & selling houses just at the wrong economic time.
So it is very possible that 'they' are talking to the attorney that you want. If that is the case, then there is conflict of interest and your chosen attorney won't accept 'you' as a client. After all, representing a corporation will bring in more financial gain for 'X' attorney....
I'm pretty sure my attorney doesn't have a conflict of interest. He is a small private attorney, not a big law firm, and my bestfriend since childhood is his legal secretary. I'm sure my friend just hasn't gotten the chance to call me back yet.
What I really don't understand is how Neumann Homes can legally give me a signed and notarized affidavit at closing stating that all contractors have been paid. Isn't that fraud? They obviously lied or I wouldn't be getting liens now.
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A Question For You Sbd78
