Mechanic's Lien

Answer 1

What is a Mechanic's Lien?

A Mechanic's Lien is the right of a craftsman, laborer, supplier, architect or other person who has worked upon improvements on a particular parcel of real estate to place a lien on that real property for the value of the services and/or materials if not paid. The lien is used to enforce payment in order to clear the title to the property, because property with a lien on it cannot be easily sold until the lien is satisfied/paid off.

Placing a Mechanic's lien In some states, a claim must be filed in the county clerk's office or a suit brought within a certain period of limited time. On the sale of the building these liens are to be paid pro rata (a share to be received or an amount to be paid based on the fractional share of ownership). In some states no lien is created unless the work done or the goods furnished amount to a certain specified sum, while in other states there is no limit to the amount.

A number of technical laws surround mechanic's liens, including requirements of prompt written notice to the owner of the property and the amount still owed (even prior to the general contractor being late in making payment), in some states there are limits on the amount collectable, and various time limitations to enforce the lien. The enforcement of the mechanic's lien is accomplished by filing a lawsuit to foreclose the lien and have the property sold in order to be paid.

Property owners should make sure that their general contractors pay their employees or sub-contractors to avoid a mechanic's lien, since the owner could be forced to pay the debts of a general contractor even though the owner has already paid the contractor. If the worker or supplier does not sue to enforce the mechanic's lien, he/she may still sue for the debt.

How To Get a Mechanic's Lien Released

If a mechanic's lien has been filed against you, you have a few options:

• Satisfy the Lien: Paying the lien amount can release a mechanic's lien. However, if paying the lien amount is not equitable for you, negotiate a more reasonable payment. As part of the settlement, have the contractor sign a mechanic's lien waiver and release that removes the lien from your property.
• Lien Release Bond: You can challenge the amount or existence of the lien with a lien release bond. A lien release bond shortens the lien claimant's enforcement period and can release your property from the mechanic's lien or terminate a foreclosure action.
• Court Ordered Release: If the lien claimant fails to meet the statutory requirements, the mechanic's lien is void. If the lien claimant fails to execute a release of the mechanic's lien, petition the court to release the lien. You must be proactive to ensure the mechanic's lien is released. If not, the lien will remain and can cloud your title.

Always Consult An Attorney Regarding Legal Issue

A lawyer can also help you draft a contract that anticipates and protects against challenges, prior to a lien being placed on the property. However, if someone has already attached a mechanic's lien to your property, an attorney can assist you through the procedures to ensure your property will not be sold, to develop defenses if you are taken to court, and to file a release if the mechanic's lien remains in your title chain.

Disclaimer: This article is a guideline and is not legal advice - No information here is warranted or guaranteed fro any purpose; as laws vary from state to state, it is not intended to be an all inclusive discussion of the law applicable to any action in your state. Please consult with a legal professional when appropriate - if you are charged with a crime, contact a criminal defense attorney.