What Is a Mechanic's Lien?A mechanic's lien (a materialmen's lien) is a method used by those employed for the purpose of improving real property to ensure that property owners will pay them for services and materials. If the property owner does not pay for the services or materials, the individual can initiate a court proceeding to force a sale of the property to pay for the services and materials.
Basic Requirements for Mechanic's Lien RightsThese are the basic elements required in order to determine if a person has mechanic's lien rights: - Real property – A mechanic's liens only attaches to real property, such as land, a house, a condo, etc. A person cannot get a mechanic's lien for a car or something considered personal property.
- Improvements – The improvements that the contractor makes, or the materials the contractor uses, must be for the real property that the lien will attach to. For example, a contractor cannot build on one piece of land and file for a mechanic's lien on another piece of land, even if the same owner owns both pieces of land.
- Consent – The property owner must consent to the work that the contractor or subcontractor is doing on her property. A contractor or subcontractor cannot improve property without the property owner's consent.
How Does a Mechanic's Lien Work?Typically, the person employed to improve the property attaches a financial claim to the property he/she was hired to improve. The lien is like a "hold" on real property.
Generally, the property owner will be served with a notice of a lien. The lien will be recorded at the county or city recorder's office so that it becomes attached to the title of the land. If the property owner does not pay then court proceedings to sell the land for payment of the services rendered can begin.
Who Is Considered a "Mechanic"?A "mechanic" is commonly defined as someone who provides certain services, such as plumbing, painting, construction, carpentry, or someone who provides building supplies and materials. Thus, a general contractor or a subcontractor are considered "mechanics" and are given mechanic's lien rights.
Note: Some states give other professionals mechanic's lien rights. Be certain to check with your state's law.
Mechanic's Lien Waivers Often a property owner will pay the general contractor and trust that the general contractor will pay all the subcontractors. When a general contractor, however, fails to pay the subcontractors, the subcontractors may still have the right to a mechanic's lien against the property owner. Even if the property owner can prove that she paid the general contractor, courts often do not accept this as a defense to a mechanic's lien proceeding. - Waivers – More and more often, property owners will require that the subcontractors waive their rights to a mechanics lien, so that the property owner does not risk possibly paying for the same work twice.
Can a Mechanic's Lien Come with My New House?Mechanic's liens follow the house, not the owner. Some sellers improve their property just prior to a sale. If you are buying a piece of property, be certain that you check the records to see if the property has a mechanic's lien attached.
Do I Need an Attorney for My Mechanic's Lien Issue?A lawyer can help a contractor or subcontractor sift through the stiff procedural requirements and the strict deadlines for filing a mechanic's lien. If you wish to improve your property, an attorney can help you draft a waiver for the mechanic's lien. 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, and to develop defenses if you are taken to court. |
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