There was a time when a handshake was all that was needed to solidify an agreement. Those in business could come to an agreement, shake on it and that was that. Unfortunately, too many people took advantage of handshake and similar agreements — failing to follow through and pay for work as agreed. This led to the development of legal tools to help hold the parties to an agreement accountable.
One such example is the mechanics lien.
A mechanics lien is a legal tool that allows a worker to essentially claim an interest in property after they complete work on such property, and the owner refuses to honor the agreement and pay the worker. When used correctly, a mechanics lien provides contractors, mechanics, and other laborers and suppliers who work on a project, or supply labor or equipment for a project, to file an affidavit claiming a lien on the building or land for the value of their work or supplies.
This claim goes against the title of the property and remains against the title until it is paid and released, foreclosed, or expires pursuant to law.
#1: The process is important.
To claim a mechanics lien, the contractor, subcontractor, laborer, or supplier who is owed payment should ideally have a written contract with either the owner of the property (if you are the contractor) or with the contractor or subcontractor (if you are a subcontractor, laborer, or supplier) that describes the property, type of work, and payment amount. An affidavit claiming a mechanics lien based on such contract is filed in the county where the property is located. This form, the “Affidavit Claiming Mechanic’s Lien” can vary depending on the county but generally includes information about the claim, contact information of the property owner (and contractor, if applicable), statement of work completed and dates such work was completed, and description of property.
#2: Do not forget to send out notices.
You must send out notices to the owner and, if applicable, general contractor, before you can move forward with filing the affidavit claiming a lien. The timing varies depending on factors such as the type of work or supplies provided and whether you were a general contractor or subcontractor, laborer, or supplier. In general, state law provides that you should send a notice for work completed no later than the 15th day of the second month for each month after labor was complete.
You will need proof of notice to file with the court, so send those notices via certified mail and make sure to keep copies of these mailings.
#3: Record an affidavit at the right time.
Wait until after sending notices, but do not wait too long. There are deadlines. If you wait too long the court will not let you move forward with claiming a lien. Ideally, your affidavit claiming a lien should be filed as soon as possible and preferably within thirty days from the date the project is complete or by the 15th day of the third month following the date you provided labor or supplies, whichever is earlier.
#4: File suit within one year.
If your claim remains unpaid, to protect your claim, you must file suit to foreclose the lien within one year from the last day you were authorized to file an affidavit claiming mechanic’s lien.
*This information is not applicable to construction work issues involving oil and gas wells, or other claims against mineral properties.