Read This Before Swinging That Hammer: Why Property Ownership Verification is Your Best Defense
As a contractor, remodeler, or specialized service provider, your trade relies on trust and payment. You pour your skill, time, and materials into every job. But what happens when the person hiring you isn't actually the legal property owner?
This oversight, a common but dangerous pitfall, can lead to devastating financial losses and complex legal nightmares. Before you break ground or sign on the dotted line, you must verify the person authorizing the work has the legal authority to do so.
Here are three major legal and financial reasons why verifying property ownership is the essential first step for any project.
1. The Liens and the Legal Mess: Securing Your Right to Payment
This is, by far, the most critical reason for ownership verification. Your primary legal tool for ensuring payment, the mechanic/materialmen's lien, is only effective if filed against the actual, legal owner of the property.
What is a Mechanic/Materialmen's Lien? A mechanic/materialmen's lien is a statutory right that allows contractors, suppliers, and laborers to place a claim on the property itself to secure payment for the services and materials they provided.
The Flaw in the System: If you contract with a non-owner (such as a tenant, an unauthorized relative, potential scammer, or someone who recently sold the property), and they fail to pay, your attempt to file a lien against the property could be invalidated. The true owner can argue they never authorized the work, nullifying your claim, potentially suing for damages and leaving you without recourse against the property.
2. Risk of Slander of Title: A Lawsuit Waiting to Happen
If you mistakenly contract with a non-owner, and then try to file a lien against the true owner's property for non-payment, you expose yourself to a highly damaging counter-claim: Slander of Title.
Slander of Title occurs when someone maliciously (or sometimes accidentally, due to severe negligence) makes a false statement that injures another person’s interest in property.
The Scenario: A tenant hires you for a major renovation. The tenant skips town without paying. You file a lien against the actual landlord's property.
The Fallout: The landlord (the true owner) could argue that your improperly filed, unauthorized lien is a false statement that has "slandered" their title, potentially blocking a sale or refinancing. You could be sued for damages, including attorney's fees and any financial loss the owner suffered due to your lien.
3. Getting Stiffed: Who is Legally Obligated to Pay You?
Imagine you complete a $15,000 project, only to find the person who hired you was a renter whose lease explicitly forbade structural changes. When that person defaults, you are in a precarious position.
If the actual property owner didn't authorize the work, they have no contractual obligation to pay you. You have a contract only with the non-owner.
This forces you to:
Chase a Ghost: Spend time and money pursuing the non-owner personally, who likely has limited assets.
Walk Away Empty-Handed: Absorb the entire cost of labor and materials because the entity with the deep pockets (the property itself, via a valid lien) is protected.
How to Verify Property Ownership Safely
Protecting your business is simple, inexpensive, and takes minutes.
Ask for the Deed: Always request a copy of the deed or a recent mortgage statement from the client to confirm their name matches the property address.
Check Local Records: Visit your county’s Assessor’s or Recorder’s Office website. Property records, including the current owner's name, are almost always public information and searchable online by address or parcel number.
Use a Title Company: For larger projects, consider running a quick, inexpensive title search through a local title company for peace of mind.
Don't let an hour of work verification cost you thousands in legal fees and lost revenue. Make property ownership verification a mandatory step in your intake process!
Need legal guidance on filing a valid mechanic's lien or navigating a property dispute? Contact us today for a consultation.