A mechanic's lien is a legal means by which those who work on real property, such as sub-contractors, suppliers, auto mechanics, and others, may make claim for payment for the work done. Upon full payment, the lien holder provides a release of the lien. However, if the lien is not paid within the proscribed time limit, the lien holder(s) may request that a judge order a foreclosure of the property to satisfy the lien holders in the order of their priority. Because sub-contractors often have less recourse to file lawsuits for payment than other service or personal property providers, a lien is the most appropriate means for them to ensure payment.
There are a wide variety of workers and laborers who are entitled to file mechanic's liens for work done either to construct, improve, or repair property. The specific guidelines for mechanic's liens vary by state, but these general categories are representative.
There are specific laws in each state that govern how a mechanic's lien is filed and pursued. However, in most states a mechanic's lien must be "perfected," or filed and pursued in accordance with the state statutes, ending in foreclosure. They generally follow these conditions:
All federal projects prohibit claims by private parties, such as sub-contractors and suppliers. As a result, they cannot attach liens to federal, state, or municipal property. To protect sub-contractors, a law called the Miller Act applies to construction projects of $100,000 or more. The contractors to post two bonds with a corporate surety company approved by the U.S. Department of Treasury. Those bonds are
As a result, federal projects cannot be subject to the claims of these sub-contractors and suppliers, only the contractor and the bond company can. Those principles have been adopted at the state level in recent years as well, often being referred to as "Little Miller Acts."
Since the laws governing mechanic's liens differ by state, it is important to consult a real estate attorney to determine the requirements for filing a claim, fighting a claim, and pursuing your rights under these laws. They have the experience and expertise to ensure that you take advantage of all the protections the laws in your state allow.