Tuesday 11 October 2022

Mechanic’s Liens To Protect The Service and Materials Providers’ Interests

Mechanic’s Liens To Protect The Service and Materials Providers’ Interests

The objective of a mechanic’s lien is to protect the interest of an individual or company providing any materials or labor to property owners and if there is any payment pending. Mechanic lien will be valid for real property as well as personal property and there are many online resources providing specialty mechanic’s lien consultation as www.lienitnow.com.

The root of term “lien” is from French language which means ‘to link’ similar to “liaison.” It is now known in various names in the real estate industry including;

  • Construction lien – for those who are offering construction services.

  • Materialman’s lien – to cover the interests of individual material provider.

  • Supplier’s lien – Same as that of materialman’s lien to protect a bulk material supplier.

  • Laborer’s lien – Individuals or companies offering labor, including architects and designers offering improvement works.

  • Artisan’s lien – In the domain of personal property.

Mechanic’s Liens To Protect The Service and Materials Providers’ Interests

Usage of Mechanic’s Lien

Mechanic liens are commonly used in case if a mechanic or handyman offering services on home construction or improvement works and the owner fails to pay. In such a scenario, the service provider can claim a lien against the property of the owner. In case of a real estate transaction, the buyer would have to pay the service provider who raised the lien first to complete the purchase. In this, the seller gets only the difference after clearing lien.

How Long a Lien Stays?

It is a misconception that mechanics lien will stay of record indefinitely. Each US state has specific regulations on how the lien stays on the property. Say for example, in California, the lien stays only for 90 days after filing. Before that, the claimant need to file a lawsuit to foreclose the payment before the lien gets void. You can consult www.lienitnow.com to get further details about lien rules at different states.

So in most of the cases, filing a lien is just the first step. You need to follow it up with a proper lawsuit to foreclose, and the lien should be active when the judge evaluates the validity. It means hiring an attorney to file a lawsuit will be needed, which is a costly affair. However, the bright side of it is that only a few lawsuits go to judgment in case of mechanic’s lien as most of them are settled outside before the trial itself.

Taking the Lien Off

What to do if time expires to foreclose the lawsuit? How is it possible to take the lien off?

Some US states allow the option to bring a special petition to efface the record, but this also is expensive. However, the court may assign the attorneys’ fees also against the stubborn party. The proper move is to make the attorney issue a demand letter to lien claimant indicating that it is invalid. This is ideal if you make an out-of-the court settlement. It is a special release as it doesn’t indicate that the payment is made, but simply that lien is released as it got expired. For more details related to dealing with stubborn lien claimants and other measures to take, visit www.lienitnow.com.