Any individual or company that performs work on someone else’s property has a right to file a lien against the property when the owner fails to pay for construction work. This means that all contractors and subcontractors can use this remedy as a way of resolving payment problems. Once a lien is filed, the property owner is prohibited from either selling or refinancing the property without first paying off the debt.
The process that claimants must follow regarding filing a lien differs throughout the nation. The state law in many jurisdictions requires subcontractors who don’t have a direct contractual relationship with the owner, to file a “Preliminary Notice” within 20 days of performing labor or furnishing materials to the project. This is done to let the owner know there is a potential problem so that steps can be taken to ensure the subcontractor gets paid. All claimants are required to file a lien in the county where the property is located. They must show proof that work was completed and attach a copy of the bill.
In order for alien to be enforced, the contractor must file a court action within 90 days in order to enforce the lien. If they fail to do so, then the lien is no longer valid. In some states, the owner can fight a lien if the contractor is unlicensed. When the owner receives a preliminary notice that a mechanic’s lien is in process, they can go to court and file a “motion for judicial review”. This starts the process by requesting that the court review the validity of the lien. In many cases, the owner can fight a lien by arguing that the work performed was unsatisfactory or not up to code. Sometimes the validity of the contract may be in question, which can nullify the relationship between the contractor and owner.
Any lien against a property can result in serious legal woes for the owner. Once a claimant has successfully filed a mechanic’s lien, there may steps that can be taken to invalidate the claim. It’s best to consult with an experienced real estate attorney who can assist you with the legal processes required to remove or fight a lien against your property.