What is a Mechanic’s Lien?
A Mechanic’s Lien allows a claimant (such as a contractor, subcontractor, or supplier), who is providing labor or materials for another party, to establish a legal claim for their labor and/or supplies in the case of outstanding payments. When a contractor or supplier files a lien, they gain a security interest in the property which can ensure the property owner or hiring contractor pays them.
A filed Mechanic’s Lien form obstructs a property’s land title which prevents the owner(s) from selling their land until they pay the claimant. Ultimately, if you’re a contractor or supplier who is owed payment, a Mechanic’s Lien can protect your financial interests. Once you are paid for your work or materials, you must cancel the lien through a Lien Release.
A Mechanic’s Lien is also known as a:
- Contractor’s lien
- Laborer’s lien
- Construction lien
- Builder’s lien
Who is the claimant?
Also known as the lienor or lienholder, the claimant is the person seeking to apply or claim the Mechanic’s Lien. Generally, claimants can be any party who was hired to provide services or materials for the construction, maintenance, or repair of a property.
How does a Mechanic’s Lien work?
Most often, simply creating and filing a Mechanic’s Lien is not enough to establish your legal claim. In the United States, some states require contractors and suppliers to provide hiring contractors and property owners with specific notices before and after filing a lien. Therefore, your process to properly create and file a lien will vary depending on your state’s laws.
In addition to checking your state’s requirements, follow these general steps to ensure your lien’s legal enforceability:
1. Provide a pre-lien notice
A pre-lien notice informs the hiring party (and any other relevant parties) of your involvement in a specific project. For example, if a general contractor hires you to provide specialized services for a renovation project, a pre-lien notice would inform the property owner and the general contractor that your contribution has begun.
A pre-lien notice (also known as a preliminary notice) must be sent around the time that you first provide services or materials for a hiring party. Some states require contractors to have provided this notice in order to file a lien.
2. Provide notice of intent to lien
A notice of intent to lien notifies the property owner and any other hiring party that you intend to file a Mechanic’s Lien if the appropriate party doesn’t pay you. Some states require you to send a notice before filing a lien.
Ideally, through sending a notice and giving the owing party a chance to rectify the situation, you can secure the payment that you earned and avoid filing the lien.
3. Create and file the lien
Once you’ve given the property owner and all other relevant parties adequate notice (determined by your state’s laws), you can create a Mechanic’s Lien and file it with the relevant office. You must file a Mechanic’s Lien in the same county where the property is located.
4. Notify and serve the property owner
Once you’ve created and filed the lien, you may need to notify and serve the property owner with it. Upon filing with the appropriate office, you should receive a copy of the lien. Provide the property owner with a copy of the lien as soon as possible, either in-person or by mail. In some states, you may have to provide your hiring contractor with a copy of the lien as well.
5. Release the lien or seek legal action
If the property owner or hiring party pays you to satisfy the lien, you must cancel the lien with a Lien Release. Failure to quickly release the lien may result in a financial penalty.
If the hiring party still doesn’t pay, then you may seek legal action to enforce the lien. In this case, you may require the assistance of a lawyer. Through seeking legal action to enforce a Mechanic’s Lien, a court could foreclose on the property, meaning it would recover the amount you are owed by taking ownership of the property and selling the property.
What is the purpose of a Mechanic’s Lien?
The main purpose of the Mechanic’s Lien is to financially protect contractors, subcontractors, and suppliers when they provide services or materials for a hiring party. By filing and securing a legal claim against a property, you can prevent the property owner from selling it until you’re paid and the lien is resolved. A Mechanic’s Lien prevents a property sale by obstructing the land title from being clear.
For preventative protection, contractors, subcontractors, and suppliers can protect themselves with an Independent Contractor Agreement or Service Agreement to set the terms.
What’s included in a Mechanic’s Lien?
Create a Mechanic’s Lien with this template and provide the following information:
- Property details: Provide the legal description of the property in which you provided services or materials.
- Party details: As the claimant (lienor), provide your name and address. In addition, provide names and addresses for the owner/hirer of the property in which you provided services or materials.
- Date of service: If you worked on a property or provided building materials, specify the start and end date of your service.
- Work description: Provide a description of the labor and/or materials that you provided. Consider attaching the original work contract to the lien. In addition, consider attaching an itemized list of the labor that you performed or the materials that you provided.
- Price details: As the claimant (lienor), state the amount that you are owed.
Are there different types of Mechanic’s Liens?
Some people may argue that there are different variations of Mechanic’s Liens and be inclined to differentiate between types based on the creator’s profession, such as supplier versus architect. As such, some people may say that “Mechanic’s Lien” is a general term and there are more specific versions, such as:
- Supplier’s lien
- Materialman’s lien
- Designer’s lien
- Artisan’s lien
Ultimately, these examples are still Mechanic’s Liens, and they all function in the same way. Differentiating between these types is a personal preference.
Where can I find the legal description of the property?
Generally, you should be able to obtain the legal land description for the property in which you provided services or materials from the County Recorder's office (also called the County Clerk or Register of Deeds office).
How is a Mechanic’s Lien enforced?
Ideally, notifying the hiring party that you will create a Mechanic’s Lien due to outstanding payment will motivate them to remedy the situation as quickly as possible. By working with them, and possibly giving them extra time to pay you, you may be able to avoid having to enforce your lien.
If the hiring party refuses to pay you after you give them adequate notice of the owing amount and your intent to lien, you may have to file your case in court. The court will determine the merits of your claim and determine if and how the lien will be enforced. For example, a court may determine that the property will be sold to pay you.
Who should create a Mechanic’s Lien?
Any contractor, subcontractor, tradesperson, or supplier who is owed money for providing work or materials to a hiring party, such as a homeowner or general contractor, should consider creating a Mechanic’s Lien to protect their own financial interests. Any of the following professionals may find a Mechanic’s Lien useful:
- General contractor
- Carpenter
- Drywall installer
- Framer
- Electrician
- Painter
- HVAC specialist
- Roofer
- Landscaper
- Plumber
Who can file a Mechanic’s Lien?
Generally, the claimant (lienor) should file the lien, but most states also allow for some other person with “personal knowledge of the facts" within the claim of lien to file it.
Also, if you’ve created a Power of Attorney in which you’ve appointed an agent to act on your behalf, your agent may file your Mechanic’s Lien.
Should I include attorney fees in my claim?
Generally, attorney fees should not be included in the amount claimed. However, some states allow you to seek recovery of your attorney’s fees and court costs during litigation. LawDepot’s template outlines that “any recoverable fees” will be added to the claim amount.
Can a property owner fight a Mechanic’s Lien?
Depending on the state, a property owner may object to your lien claim in court. In this case, the court will determine the validity of your lien claim by examining the available evidence and possibly taking a deposition from all relevant parties.
Check the laws regarding Mechanic’s Liens in the property’s area to discover an owner’s rights to fight a lien.
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