Mechanic\u2019s\nliens protect the interests of contractors, subcontractors, material suppliers,\nand laborers on construction jobs when work goes unpaid. In Ohio, a mechanic\u2019s\nlien is a right provided under the state Constitution. Liens are available\nagainst both private and public jobs in Ohio. Find the mechanic\u2019s lien law in Chapter\n1311 of the Ohio Revised Code. Because another goal of the mechanic\u2019s lien\nstatutes is to protect owners from double payment (to those he or she contracted\nwith as well as to lower-tiered unpaid contractors or material suppliers), the\nlaw demands strict compliance to secure and enforce a lien.<\/p>\n\n\n\n\n\n\n\n
A\nmechanic\u2019s lien must be filed on a single or multi-family dwelling or\ncondominium within 60 days of the last work. A copy of the lien must also be\nserved on the owner within 30 days of the lien filing. Ohio Rev. Code. \u00a71311.06.\nOn all other construction jobs (commercial and industrial), the lien must be\nfiled within 75 days of the last work and the owner must be served within 30\ndays of its filing. Service should be made by certified mail but other\npermissible methods include posting a copy of the lien notice at the jobsite if\nthe owner cannot be found in the county.<\/p>\n\n\n\n
To\nprevent problems that require an owner to pay twice, and to inform all\ninterested parties of who is involved in the construction job, a notice of\ncommencement must be filed by the owner or the owner\u2019s agent. Ohio Rev. Code. \u00a71311.04.\nBut, if a notice of commencement is not filed within 10 days after the work\nbegins, the general contractor may file it. The notice is required in any\nconstruction projects except those purely for home improvement. The notice of\ncommencement must include the full legal description of the property, name and\naddress of the owner, owner\u2019s designee (if any), name and address of the\ngeneral contractor, lender\u2019s name and address, and any surety\u2019s name and\naddress. The notice is then served by the owner or owner\u2019s agent. <\/p>\n\n\n\n
Only\none notice needs to be filed but it can be amended. If amended, the notice\nrelates back to the time of the original notice filing. The notice of\ncommencement must be recorded, although actual notice is typically provided by\nposting it at the jobsite. Copies of the notice must be given to anyone under a\ndirect contract with the owner. The owner is required to provide the copies\nwithin 10 days of any request from a subcontractor, supplier, or laborer.<\/p>\n\n\n\n
Before\nfiling a mechanic\u2019s lien, record the required prelien notice and serve it on\ninterested parties under state law. Prelien notice in Ohio is known as a notice\nof furnishing. The notice of furnishing is a document used by all contractors,\nsubcontractors, laborers, and material or equipment suppliers without a direct\ncontract with the owner or his or her agent. Ohio Rev. Code. \u00a71311.05. The\nnotice is required on all commercial projects where a notice of commencement\nhas been filed and served, for work on residential subdivisions, condos, or\nmulti-unit dwellings, and on jobs involving residences consisting of 3 or more\nstructures if a notice of commencement was filed and served. Note, however,\nthat the notice is not required on any residential or home improvement\nprojects, or by laborers only, or on commercial projects if a notice of commencement\nwas not filed or served.<\/p>\n\n\n\n
File\nthe notice of furnishing no later than 21 days after the date on which the\nsubcontractor or supplier first furnished labor or materials to the jobsite. It\ncan be served later, but it will only be effective for a lien that covers\nunpaid work that occurred within 21 days of actual service and all later work. The\nnotice is not required, however, unless and until the owner files his notice of\ncommencement. Thus, if the notice of commencement is filed late, the 21-day clock\ndoesn\u2019t start ticking until it is filed. If the owner fails to serve a copy of\nthe commencement notice within 10 days of its request in writing from a\nsubcontractor or supplier, the notice of furnishing is not due until 21 days\nafter receipt of the notice of commencement.<\/p>\n\n\n\n
Always\nrequest a copy of the notice of commencement from the owner. Do not file too\nearly, as Ohio caselaw supports the assertion that deadlines are heavily\nenforced; one case indicated that even a one-day early notice of furnishing will\ncause a lien to be declared invalid. Send the notice of furnishing via\ncertified mail with a return receipt requested. This is usually the quickest,\nleast expensive, and most effective method of service. <\/p>\n\n\n\n
If\nthe contract is with a prime contractor, only serve the notice on the owner. If\nthere is no contract with the prime contractor, then serve the general\ncontractor and owner. The notice of furnishing must be in writing but does not\nneed to be verified or notarized. Serve the owner or the owner\u2019s designee as he\nor she is stated in the notice of commencement. If multiple owners are listed\nin the notice of commencement, serve the first owner listed.<\/p>\n\n\n\n
Mechanic\u2019s\nliens can be filed by general contractors, subcontractors, laborers, and\nequipment suppliers for unpaid labor, materials, equipment, and any accumulated\ninterest. Construction managers may also file such a lien if under a direct\ncontract with the owner. Companies providing equipment are also entitled to a\nmechanic\u2019s lien for any unpaid amounts. For material suppliers to obtain a lien,\nhowever, the material must be delivered to the jobsite, but suppliers\ndelivering to other suppliers are not entitled to a lien unless the supplier\nreceiving the delivery is a subcontractor.<\/p>\n\n\n\n
When\nfiling a mechanic\u2019s lien, include the amount of the lien, a description of the\nproperty, the owner\u2019s name, and the claimant\u2019s signature. The lien must be\nnotarized and verified. To obtain a mechanic\u2019s lien on any residential job, file\nan affidavit of lien within 60 days of the final furnishing of work or\nmaterials. For subcontractors and suppliers, the 60-day period is measured by\nthe last day materials or labor are furnished. For the general contractor, the\ntime begins on the last day that anyone in the chain under them furnished work\nor materials on the job. This time extends to 75 days for commercial or\nindustrial projects. <\/p>\n\n\n\n
The\naffidavit must be filed and served on the owner or other individual designated\nin the notice of commencement within 30 days of recording the lien affidavit. If\nthere is no address for service, post the lien notice to the job site. In this\ncase, post the notice between days 31 and 41 following the recording of the\nmechanic\u2019s lien. Under Ohio law, serve all owners, including tenants,\npartial-owners, and spouses of these parties since Ohio recognizes the dower\ndoctrine. <\/p>\n\n\n\n
Lien\nreleases and lien priority: <\/p>\n\n\n\n
Once\na claimant obtains a mechanic\u2019s lien for an unpaid amount that the owner\neventually pays, the owner may send a request to release the lien. If the\nclaimant receives this after the payment has cleared, they must release the\nlien within 30 days of its receipt. Failure to release the lien can lead to\nliability for any damages, including court costs and attorney\u2019s fees. Ohio Rev.\nCode. \u00a71311.20. <\/p>\n\n\n\n
The last issue to discuss involves lien priority. Sometimes multiple mechanic\u2019s liens may be filed on a project. If the property is foreclosed upon, there may be a limited pool of funds to pay everyone with a valid lien claim. Therefore, the rules of priority are set up to ensure those first in time, are first in right to their claims. The only exception occurs when a notice of commencement is recorded on the same day as a construction mortgage. In that case, the mortgage will win priority.<\/p>\n\n\n\n