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Fraudulent Release of Lien Form

Who is responsible for a fraudulent release of lien form?

Fraudulent Release of Lien

Dear Diane: I'm a GC on a project and although I didn't realize it, I received a fraudulent unconditional release of lien form from my Sub that was supposedly from his material supplier, that indicated that the material supplier had been paid in full, so I paid the Sub the balance of his contract.

Now the supplier is saying he didn't get paid and he's going to put a lien on my client's property if I don't pay him what he's owed. Turns out it was a fraudulent release of lien that I received from the supplier by way of the Sub, the Sub had actually forged it.

To my dismay, but not surprise, the Sub is now nowhere to be found.

Do I have to pay this bill again? And if I don't, can the supplier file a lien on the property? Charles D.

Dear Charles: I'm so sorry this has happened. We actually had a GC who had the same thing happen to him, the Sub gave him a fraudulent release of lien from his supplier, the Sub had forged the release.

In the end, the GC ended up having to pay the bill again to keep the supplier from filing a lien on his client's property. :(

Before you pay the bill again I'd strongly suggest that you contact an attorney first and explain the situation to him. For projects located in California, contact David Barnier Esq. at 619.682.4842, mention TheContractorsGroup.com (that's one of our other websites), explain about how you ended up with the fraudulent release of lien and he'll speak with you for about 20 minutes at no charge to try to help you out.

If you're not in California then please try contacting Ted Levy at 206.626.5444. He's located in the state of Washington and works at a law firm that keeps up on many of the lien laws for all 50 states.

How to possibly avoid this situation in the future

In the future, always verify every single release of lien form that you get, whether it's conditional or unconditional. Look up the business that issued/signed the release of lien document and call them. Speak with an upper-level management person and tell them that you're verifying to make sure you haven't received a fraudulent release of lien.

Unfortunately this isn't a fail-safe method but it's a darn sight better than just trusting that the document is valid. As the population grows there are more and more dishonest people and the world of contracting is no different. Protect yourself and your client. Even if you've done business with a particular Sub for years, you still MUST verify the form, make certain it's not a fraudulent release of lien form.

Want to be a PRO at doing lien release forms?

--> Check out our lien waiver release forms package that includes an in-depth article that'll tell you EXACTLY how to do lien release forms!

Have a question you'd like to ask? Click the Ask Dave button in the navigation bar on the left.

Please note that the information posted at this website is not to be taken as legal advice. Please contact an attorney for help with specific legal questions.