The supplier of construction laborers, materials, subcontractors can avail the mechanic’s lien. First, however, there are some initial steps for the process of filing of mechanic’s lien. These are as follows:
Generally, as per state laws, preliminary notice is sent at the start of the construction projects to the owner regarding the supplier’s service.
Sending notice of intent that in case of payment failure, mechanic’s lien can be imposed over such property for compensation for their supply of labors, materials, and so on.
If payment remains unpaid, whether in whole or in part, such mechanic’s lien shall be filed against the property owner by the unpaid contractors, sub-contractors, or any person related to such construction activities.
Enforce the lien; if satisfied, release the lien from the property. However, even after enforcing such a lien, the property owner is not fulfilling the lien then enforces the lien and can file in court for foreclosure of such property.
Features of Mechanic’s Lien
Mechanic’s lien is a safety measure applied by the supplier of construction work to fasten the undue delayed payment, avoid dispute in the construction activities, and make the property owner liable for nonpayment of its dues. Some of the features of the mechanic’s lien are as follows:
Mechanic’s lien can be filed for any unpaid progress activities, final payment, or for any retainers.
Generally, the lien should not be filed before the commencement of the construction activity; however, there can be filing of such lien before initiation of any activity in extreme cases
There is no legal restriction on filing lien before or after activity.
Contractors can file lien even if they have not finished their assigned work. The only condition in such filing is that they should fulfill the state’s prescribed time limit.
Mechanic’s liens are not allowed on public or government-related projects.
The contractor should have a license before initiating a mechanic’s lien; moreover, in many states, the lien rights can be forfeited if there is no license.
The contractors can waive the mechanic’s lien for the specified amount.
There is a specific timeframe under which lien is to be filed.
Generally, mechanic’s lien is to be used after all options to recover payments have been exhausted. Therefore, this measure is the last resort for obtaining relief from nonpayment.
The mechanic’s lien claimants must send all the relevant notices to the property owner at the prescribed period.
The suit for lien should contain the unpaid payments or nonpayment of the sum dues from the activities and should not include escalation claims or any other cost. However, in many states, a lien for a foreclosure suit against property can include attorney’s fees, courts or other legal costs, penalties.
Filing a fraudulent lien can cause liability, damages, or criminal penalties. Even invalid or defective filing can cause damage to the construction claimant.
Lien can be filed per the states’ prescribed time limit; otherwise, such lien will have no validity.
Mechanic’s lien has priority over other claims in the event of foreclosure or sale of the property. This is suitable even in case of bankruptcy.
Protection from the Mechanic’s Lien
This mechanic’s lien creates a burden on the property owners and is liable to compensate the construction suppliers. This liability is involuntary and cannot have any remedy for the property owners. However, certain measures can ensure that mechanic’s lien is not imposed over property owners, which are as follows:
File a notice of commencement of construction activity and submit such prescribed forms to the Circuit Court Clerk. Post such certified copy at the job site detailing the intended work as this form’s failure shall lead to a penalty of twice the amount for the same work or materials.
Liens can be challenged in the court, which prima facie disputes the entitlement of such liens.
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