{"id":160,"date":"2018-10-29T03:23:17","date_gmt":"2018-10-29T03:23:17","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=160"},"modified":"2024-04-25T23:21:07","modified_gmt":"2024-04-26T03:21:07","slug":"what-is-a-mechanics-lien","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/what-is-a-mechanics-lien\/","title":{"rendered":"What is a Mechanic’s Lien?"},"content":{"rendered":"\n

The complete guide to the mechanic’s lien process.<\/h2>\n\n\n\n

In general, a lien is a type of property right which\ngrants a creditor an interest over specific property of the debtor named in the\nlien. The lien is used as security for the debt or for performance of some act.\nA mechanic’s lien is a security interest in the title to property for the\nbenefit and protection of those who have supplied labor or materials that\nimprove the property. Despite its name, mechanics are not the only individuals\nentitled to such a lien. Mechanic\u2019s liens are used to ensure payment of debts related\nto real property (such as land or real estate) and personal property (such as\nan automobile or equipment). <\/p>\n\n\n\n\n\n\n\n

\"What<\/figure><\/div>\n\n\n\n

For example, in terms of personal property liens, when\nyou take your car into a repair shop the mechanic is entitled to a lien on your\nautomobile which is not released until you pay her for the services and\nmaterials provided. Along the same lines, such liens are available against real\nproperty when a contractor or other service provider makes improvements on the\nland or buildings. Imagine you are a contractor enlisted to build a dream\nkitchen for a client. You install new cabinets, granite countertop, and a\nstainless steel range but the client never pays up. As the unpaid contractor,\nyou are now entitled to file a mechanic\u2019s lien against the client\u2019s home to\ncollect your debt.<\/p>\n\n\n\n

When discussing real property, a mechanic\u2019s lien\nis also known as a construction lien. It is also sometimes known as a\nmaterialman’s lien or supplier’s lien when referring to those supplying\nmaterials, a laborer’s lien when referring to those supplying labor, and a\ndesign professional’s lien when referring to architects or designers who\ncontribute to a work of improvement. In regard to personal property, it is also\ncalled an artisan’s lien. All 50 states as well as the District of Columbia\nprovide legislation allowing laborers to obtain a mechanic\u2019s lien to ensure\npayment for services. In some states, only private projects are subject to a\nmechanic\u2019s lien. Other states, such as New York, also allow for liens against\npublic or government projects. Some states require additional notice against\nresidential properties only. Be aware that in most states, if the work\nperformed requires a license, unlicensed individuals may not be allowed to file\na lien.<\/p>\n\n\n\n

The lien is a useful device for contractors,\nsubcontractors, and material or equipment suppliers because it creates an\nencumbrance (a burden or impediment) on the property which can cause problems\naffecting a future sale. This means that future potential buyers may be wary of\npurchasing the property subject to a lien, which gives the owner an incentive\nto pay for the work or materials provided so the lien can be discharged. Most\ntitle insurance companies will also refuse to clear title unless the lien is\naffirmatively removed by either obtaining a release from the lien claimant or\nthrough a court order. Even invalid liens can create a \u201cclog\u201d on title.<\/p>\n\n\n\n

The lien thus creates pressure on the property\nowner to resolve it through paying the lien claimant or at least motivating him\nto come to some resolution with the contractor or service provider. Additionally,\nthe lien holder may eventually foreclose on the lien, usually by filing a\nlawsuit within the statutory period, which in turn forces a sale of the\nproperty entitling the lien holder to payment after the foreclosure sale is\ncompleted. However, if there are multiple lien claimants (often the case when\nthere are multiple contractors involved), issues of priority arise.<\/p>\n\n\n\n

Mechanic\u2019s liens on real property can only be\nobtained by strict compliance with each state\u2019s lien filing process. Many\nstates also impose sanctions ranging from forfeiture of the lien to criminal\npenalties if the lien claim is exaggerated or fabricated in any manner. Therefore,\naccuracy and thoroughness is required in drafting a mechanic\u2019s lien against the\nowner of real property. The lien claimant must be certain to base the amounts\nclaimed on the contract price along with any reasonable overhead and additional\nwork performed as necessary. Inflating or exaggerating a claim can be fatal to\na lien and your right to payment. Attorney\u2019s fees usually cannot be included in\nthe lien amount although they may be recovered if the lien is enforced through filing\na lawsuit.<\/p>\n\n\n\n

In order for a lien to be enforceable, it must be\n\u201cperfected\u201d through compliance with the legal requirements for maintaining and\nenforcing the lien provided by each state\u2019s lien law. Perfection refers to the\nadditional step of ensuring one\u2019s claim to a security interest in order to help\nassure that no other party, such as another creditor or a bankruptcy trustee,\nwill be able to claim a right to the same property. State lien statutes outline\nthe guidelines for creating a lien including any form of pre-lien notice as\nwell as the requirements for timing and service (the formal delivery of a\ndocument such as a writ or summons) of all notices. <\/p>\n\n\n\n

Typically, the timeline for filing a mechanic\u2019s\nlien begins with filing a notice of commencement of work. This notice is\nrequired in some but not all states. Filing requirements for notice of\ncommencement differ according to state, but usually it must be filed in a\npublic records office as well as served through certified mail on the owner. Some\nstates also require a notice of intent to lien to be filed before the actual\nlien. This is typically used when the project remains unpaid.<\/p>\n\n\n\n

The holder of the lien must comply with the\nstatutory requirements for maintaining and enforcing it. These requirements,\nwhich contain strict time limits, are generally as follows: <\/p>\n\n\n\n