If you are concerned about getting paid for your work as a contractor, you may want to consider filing a mechanics lien. A lien prevents the owner of a piece of private property from selling, refinancing, or transferring ownership of the property until it has been paid by the property owner. In this guide, learn how to complete the Mechanic Lien filing process, and how a professional title company can assist you in this process.
How to File a Mechanics Lien
The first step in filing a mechanic’s lien is to find out if you have the right to file the lien by determining whether your work or materials qualify under your state’s laws. Contractors, subcontractors, and suppliers are almost always able to file a lien, but be sure to double check. Send notice of the intent to file a lien to the property owner if your state requires it, and be sure you are within the lien placement deadline, which varies by state. Filing without cause or without following these rules can create legal numerous problems, so be sure to carefully consider your situation before continuing the filing process.
After determining that you are within your rights to send a lien, draft a lien document. This is best left to a title company professional who is familiar with the detailed lien laws of your state. To properly draft a lien, your title company agent will select a lien document that applies to your project and state and fill it out with an accurate and detailed description of the property, the official name of your business, and the amount of money you are demanding, which may include legal fees and retainage fees in addition to the amount owed for work already completed.
Next, you can file your lien document with the county recorder office in the county in which the work is being done. Keep in mind that filing in the county in which you operate your business or in which the property owner lives, if different from that of the job site, will render your lien invalid. The name of the correct office may differ, so also be sure to file with the correct entity. When filing, check that the document is formatted properly and with no typos, and that the filing fee is paid in full, and cover sheet — if necessary — has been filled out. Lien applications can be denied if any of these requirements are not met. Depending on your county office’s rules, you may be able to file by mail, in person, or electronically.
Immediately after or at the same time as filing your lien, you must deliver a copy of the lien claim to the person from which you are demanding payment, usually the property owner. In some cases, you may need to notify the construction lender as well, if one is involved, as well as everyone operating above you in the payment and contracting chain. This can be done by sending a copy of the lien filing by mail to the appropriate parties. Be sure to keep records of your efforts to serve the lien, which may be necessary to enforce the lien if the parties involved do not accept its delivery.
At this point, your mechanics lien is considered filed. Keep track of your lien’s expiration date and extend the deadline or file a suit to enforce the lien if necessary. Filing a suit in this case is also known as ‘foreclosing on the lien,’ and you should send a notice of intent if you choose this action to encourage the property owner to submit payment rather than enter litigation. Ideally, you will be paid before progressing to this point, and you will be able to cancel the lien by filing a Lien Release with the same office that initially recorded the lien.
Working with a Title Company
Speak to Mathis Title Company for more information about filing a mechanics lien and to discuss your case. The title company can help you file the lien as quickly as possible by reviewing your case and preparing the necessary paperwork, which may be invalidated by small mistakes made while filing. Robin Mathis brings decades of experience in both real estate and law to her business, ensuring that clients receive comprehensive support throughout the lien process and helping them receive the payment they are owed.