Laws for Filing Mechanics Liens

Lien laws for filing liens vary from state to state. There are no uniform lien laws. Contractors, sub-contractors, material suppliers and owners need to investigate and know the lien laws for filing liens in their states in order to avoid the loss of legal protections available to them under construction lien laws. If these lien laws are not followed exactly per the statutory requirements, the parties could lose their rights forever.

Liens laws generally pertain primarily to residential construction projects except for certain classes of lien claimants who work on certain public projects in particular states including Illinois, New York and Ohio. If you are unsure about your rights, you should speak to an attorney who specializes in construction lien laws.

Notices for Prime Contractors, Sub-Contractors, Material Suppliers and Owners

Each state has different notice requirements for general contractors, sub-contractors, material suppliers and owners. Some states require notices to be filed and recorded prior to the commencement of the construction job, while others allow notice to be filed and recorded within a short time period after construction starts.

Notice of Commencement States

For instance states like Florida, South Carolina and Georgian require the prime general contractor to file a notice of commencement prior to starting the job. Florida general contractors, sub-contractors and material suppliers have 45 days in which to record and serve a notice to owner of furnishing labor or materials. Sub-contractors or material suppliers that do not have a direct relationship with the owner must file a notice to contractor on the prime contractor during the 45 days as well.

Alabama requires that a full price lien be filed by only the general contractor or the material suppliers who have a direct relationship with the owner prior to supplying the materials. The owner may also file a pre-delivery notice and serve the material supplier in order to avoid paying for the price of materials furnished.

In Texas, subcontractors must file lien claims for retainage either by periodic notice letters or through a single pre-work notice from a subcontractor to the owner.

In Indiana, an owner may record a no lien contract within five days after the execution of the contract which could be used to bar all liens claimed by contractors, subcontractors, or suppliers in connection with work performed on residential projects and certain public utility projects.

Other State General Contractor Needs

Other states give some protection to liens after the start of the construction, but require some action soon thereafter. For example, in Michigan the notice of commencement must be filed within 20 days by the general contractor after furnishing labor or materials by the general contractor. The subcontractor must file a notice of furnishing to the general contractor and the owner. The owner is required to post the notice of commencement.

Missouri requires that the general contractor record a special statutory notice to the owner before receiving any payment, or the general contractor loses all his statutory rights and protections.

Lien Waivers

Many owners and general contractors require lien waivers be signed on their projects.
Understanding the important of lien laws for filing liens is essential for the protection of all parties involved. Before you enter into a construction contract, you should fully understand the laws and protections available to you.

Importance of Hiring a Lawyer

Since construction lien laws are so complicated and complex, it is recommended that you consult with a real estate lawyer in the state in which the construction work is going to be performed so that you are aware of your rights and obligations. If multi-states are involved in the construction project, then you will need to speak to a lawyer in each state to find out what you must do to protect your rights.

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