A mechanic’s lien is essentially a tool used in debt collection by contractors and subcontractors when the bills for a construction project have gone unpaid.
Mechanics liens put a hold on a property’s title, making it impossible to sell until the contractor is paid. In many cases, it’s an effective measure — particularly when a property owner hopes that improvements to the property will help him or her eventually make a profit on a real estate investment.
Before you start the process of placing a mechanic’s lien on a property over an unpaid construction bill, here are a few things you should keep in mind:
1. Make sure you comply with the proper notice procedures.
When you file a mechanic’s lien, you may be required to notify more than one party. If you’re a general contractor, you usually only have to notify the actual property owner. If you’re a subcontractor, however, you probably need to notify both the property owner and the general contractor who hired you.
2. Make sure that you file your lien in a timely manner.
Sometimes a property owner will make promises to pay that sound very convincing — particularly if the cash-flow problem doesn’t seem like it’s really his or her fault. However, if you wait too long to file your lien, you may be out of luck if the owner decides not to pay.
Regardless of the owner’s good intentions, you need to act swiftly to protect your own interests. Make sure that you file the lien within the appropriate timeframe following the completion of your work.
In addition, make sure that you file the lien in the proper office. Some counties require you to file with the Clerk of Courts and some counties need you to file with the County Recorder. Filing with the wrong office can put you over deadline and cause you to lose your rights.
If you need help with a construction dispute over payment, an attorney can help you understand your rights and the process that you need to follow.
