When you purchase a new home, one of your main priorities will likely be to protect it as much as possible. There are several ways to do this, including by purchasing a homeowners insurance policy. However, there is another important type of insurance you should acquire as a homeowner: title insurance. This is a form of indemnity insurance designed to shield both you and your lender from financial losses arising from issues or “defects” in a property’s title (a document that serves as proof of legal ownership of a property). One example of a common issue with a property title is a mechanics lien.
What Is A Mechanics Lien?
In the real estate industry, a lien is a right to retain possession of another person’s property until said individual discharges the debt he/she owes. A mechanics lien is a legal claim against a property for unpaid construction work. This type of lien is typically filed by subcontractors and suppliers and serves as a form of security interest in the property. Each state has its own limitation periods for when liens may be filed; therefore, it may be helpful to know your state’s specific laws regarding this subject.
How To Check For Liens On A Home
A professional home title company can assist you with the process of checking for liens by conducting a title search. This service is designed to ensure your home’s title is “clean,” or devoid of defects. If a subcontractor files a claim against your property, a title company can help you with the resulting legal proceedings.
How A Mechanics Lien Affects A Property Title
A mechanics lien creates a “cloud” on a property title. In other words, they appear in public records (e.g. with the county clerk). Until this issue is resolved, you will likely be unable to sell your home later on. It is also occasionally said that liens “travel with the land,” which means that anybody who purchases your home may demand that you repay a lien before proceeding with the transfer-of-ownership.
Can It Just Expire?
Although a mechanics lien may expire, (i.e. it can never be valid indefinitely) it may not necessarily disappear. Laws regarding liens exist in every state, but each state’s laws are unique. For example, mechanics liens in California generally expire 90 days after they are recorded. In Virginia, they must be filed within 90 days from the last day of the month in which labor or materials were provided and there is an additional 150-day deadline for receiving payments. In Florida, mechanics liens can last up to one year after they are recorded. Nevertheless, there is one fact that applies to every state: mechanics liens expire according to a specific timetable.
A Mechanics Lien Must Be Cancelled
If the subcontractor or supplier has been paid for their work, the mechanics lien should be released. If the lien is not released, anyone who performs a title search on your home can gain access to the lien filing, even one for an expired mechanics lien. If the lien has officially expired but your subcontractor or supplier has failed to release it, you may file a lawsuit alleging the lien is “slandering title” and “frivolous.”
Resolving A Lien’s Claim Before The Deadline
The attorney fees and other legal costs associated with resolving a lien’s claim can easily amount to large sums, so always be sure to release a mechanics lien before the deadline. A home title company can guide you through this process, answer any questions you may have about it, and even defend you in court if necessary.
Talk With Experts For More Info On Mechanics Liens
Reach out to the professionals at Mathis Title Company for more information on mechanics liens, how to check your property for them and how long they last. We proudly provide title insurance and other real estate services to homebuyers, sellers, and lenders throughout Northern Virginia. Our legal background also allows us to offer expert legal advice regarding home sales and purchases.
Mathis’s agents, who are highly knowledgeable about Virginia laws concerning mechanics liens, will guide you through the lien filing process and ensuing steps. Robin Mathis is an attorney who has more than 30 years of experience in the buyer and seller sides of real estate transactions. Ann Andreatos is a title agent with more than 14 years of experience in the title industry who has an excellent ability to track down missing liens and documents.