house-building.com NEWSLETTER
#214
New House Building: Money Saving, Convenience and Healthy House Tips
James Todd.
April 2003
Beginning with this edition, newsletters
will now be archived
online at: http://www.house-building.com/newsletters/newsletters.html
CONTENTS:
- What you need to know about mechanic's liens to avoid paying
twice.
- Bone Yards are not Just for Canines.
Guest article, by Chris McMinn, Professional
Cost Analyst
- Useful Links
- Thought for the Day
- Subscription Information
Please forward this newsletter to anyone whom
you think may be interested!
1. Mechanics Liens
What, you might be wondering, does your car mechanic have to do with
the building of your new house. The answer is nothing! However, a type
of lien commonly used in his occupation is applicable to and is used
in the house building industry. That is the mechanic’s lien. A
mechanic’s lien is a claim for payment put against your property
by either laborers or material suppliers who have not been paid. But
you say, I paid my builder so the builder owes these people money not
me. True that is the way it should be. Unfortunately though, that is
not the way it is! If your builder goes bankrupt or just refuses to pay
one of his subcontractors or material suppliers, a mechanic’s lien
can be filed against your property by those companies or individuals
who have not been paid. And to settle such a claim you may have to pay
those individuals, which amounts to paying twice for supplies or a service,
if you have already paid your builder for this work.
Who can file a mechanic’s lien?
As it pertains to house building the answer is virtually anyone who works
or supplies material for your house. It matters not whether this person
is your builder, your builder's subcontractors, or your builder’s
subcontractor’s subcontractors. The same is true for companies
that supply material, and their subs. Whether or not any of these parties
have a written contract with you is is largely irrelevant.
How is a mechanic’s lien filed?
A notice of lien is filed with the county clerk in the county where you
house or property is located. There is a statue of limitations or a time
limit during which such a lien can be filed. This differs state to state,
but is usually a few months in duration.
Are there other problems that can arise from
the filing of a mechanic’s lien?
In addition to the irritation of having to pay twice for goods or services,
there is also the potential problem that mechanic’s liens cause
at your bank, assuming you are financing your building project with a
construction loan. Every time you request and installment or draw to
be paid, the bank will normally check your property for liens. If a mechanic’s
lien, or any other for that matter, show up the bank may refuse to issue
the installment until the lien is satisfied.
How big of a house are you going
to build?? Find out what size of mortgage for
which you qualify.
IndyMac
Bank is your best online source for home mortgages. Online
applications, quick approvals.
Don’t let
your credit history become a headache in
your new home building process. Check
your credit.
Get
your free credit report today.
Considering a Hot Tub in your new
Home?? Look no further. ThermoSpas
Hot Tubs are offering up to $900.00 in cost savings discounts
for House-Building visitors.
Dream Home
Source, Inc.-
Search
through over 12,400 professionally-designed
stock house plans, from over 82 of North
America's top architects and designers. Easy
and fun to search for that "dream
home".
How can I avoid
the problem of a mechanic’s lien
in my building process?
Assuming you take the advice in the House Building Building Guide and hire
a builder, rather than undertake the building process yourself as the
GC, the best way to eliminate this problem is to put appropriate language
in your building contract. Your building contract should have a clause
that states the builder agrees not to file any liens against you or your
property as they relate to the building of your new home. Furthermore,
your builder should protect and indemnify you from any liens that may
be filed by his suppliers, contractors, subcontractors, and materialmen,
and further agree to settle or pay all such liens promptly.
Even such a clause in your contract is not ironclad. If your builder
goes bankrupt and cannot pay his debts, his debts to these suppliers
may be forgiven. Nothing would prohibit his suppliers or contractors
from filing a mechanic’s lien against your property. To avoid this
situation, one would have to have a list all suppliers, contractors,
etc. that your builder is planning to use in the building of your house,
and require that each of them sign an affidavit stating that will not
file mechanic’s lien. While possible, the amount of effort to get
this task done can become significant.
Probably the most important way to prevent mechanic’s liens from
being filed is to hire a reputable builder or reputable contractors.
The advice in the House Building Guide on hiring builders can go a long
way toward helping you get that done.
3. Bone Yards
are not Just for Canines
This article is excerpted
from one of Mr. Chris McMinn’s books. McMinn & Associates
are professional cost analysts and consultants. They review
and analyze a large range of residential and commercial
construction projects, applying the same methods and techniques
of cost engineering to residential construction projects
as they do for their commercial customers.
If you are looking for a professional cost consultant, we encourage you
to contact Chris.
If you are looking for written Guide to many of the same issues Chris
points out, we encourage you to take a look at the House Building Guide.
These places have got to be one of the greatest resources
for building material. Did you ever stop to ask yourself what
happens to all the mis orders, the unpaid-for-items, the forgotten,
never-picked-up, wrong-sized, wrong-handed, mis-matched doors,
windows, fixtures, appliances and so forth? Did you realize that
somewhere between five and ten percent of all building supplies
shipped today will not work, fit, match or measure up for their
intended use? What happens to this huge pile of brand new stuff?
As hard as manufacturers scramble to make sure that what was
shipped matched what was ordered, it never works out that way.
So on any given day across America, literally millions of dollars
of new building material has to be returned, restocked or dumped
somewhere for resale, disposal, melt down or whatever.
Much of this ends up in what are euphemistically called "boneyards." Places
where left-overs, surplus and all those mis-orders simply sit while someone
tries to figure out if the manufacturer will take them back (not something
they like to do) or the store can ship them somewhere else. Of this huge
pile, probably half IS eventually returned. The rest sits—somewhere.
And as fast as this mountain of material builds up, manufacturer's discontinued
stock, obsolete models, dented, scratched and damaged merchandise adds
to it.
We've spent years exploring and tracking down what happens to thousands
of windows, doors, hardware and so on. Much of it ends up in these bone
yards. To the hardware store this is, for the most part, a source of
embarrassment. They can't return it, they probably didn't get paid for
much of the stuff, and the sheer odd ball range of sizes hardly lends
itself to restocking.
Your job is to locate these bone yards in your area! You have to ask
for them. Suppliers keep this stuff hidden out back. You'll find windows,
skylights, doors, sliders, sheet metal goods...the list is usually endless.
There it sits, rusting and corroding, rotting away, representing a significant
loss to the store owner. You come along and simply ask, "Do you
have any bone yard surplus?" Strictly retail stores end up with
very little of this. But lumber yards, window suppliers, plumbing wholesale
outfitters—their stacks just keep growing.
Here's what you do: first, bring cash. Most businesses will go the extra
mile if you show them you are a serious buyer with cash in your pocket.
No matter what you need to purchase, greenbacks work. You must look through
the yellow pages for well-established businesses which specialize in
the sort of merchandise you need. Lets say you want to build a new bedroom
addition. You need interior doors and closets, along with some exterior
windows. You've put your plan together with your rough window and door
sizes determined. Check out all the window and door suppliers in your
area. Either call or visit. I prefer a visit (after a quick look out
back), whenever I see a stack of mix and match windows. Put aside a day
to do this. You will need to check out as many bone yards in your area
as possible, while carrying with you your window/door sizes. The object
is to find out everything that's available, and then sift through your
requirements, searching for the best possible match between what you
need and what is obtainable.
You have the advantage, as the homeowner, of making the final decision
as to which type of window and door you will accept. The contractor,
on the other hand, rarely has this luxury, unless he is building "on
spec." He must shop from a list supplied by the architect. Realistically,
when (and if) you ever sell your house, very few buyers will notice what
types of windows you have. We've heard of homes being sold and never
heard anyone ask (or look) if the windows were by different manufacturers.
In fact, most people will simply assume it was specified that way.
To be continued next month….
Copyright © 2003
C.
S.
McMinn
3.
Useful
Links
The
following
are
useful
links
relating
to
the
housing
industry
may
be of
interest.
EBAY Building Supply Stores
http://www.stores.ebay.com/stores/category3187/page3.html
EBAY Building Materials Stores
http://www.stores.ebay.com/stores/category20590/index.html
Contractors Warehouse
http://www.contractorswarehouse.com/
4. Thought For The Day - Charity
With malice toward none, and charity for all, with firmness in
the right, as God gives us to see the right, let us finish the work we
are in.
---Abraham Lincoln
5. Subscription Information
Was this newsletter forwarded to
you?
To subscribe, just send a blank e-mail to this address.
newsletters@house-building.com Your
address won't be shared with anyone else.
To
unsubscribe
send
an
email
to
the
above
address
and
put "Remove" in
the
subject
line.
