Mechanics Lien Templates

Construction companies and suppliers undertake significant financial risk when participating in a project. If the property owner or developer refuses to pay, the builder or supplier may lose all the money they spent on labor and materials.

In these situations, those involved in the project may file a mechanic’s lien. Doing so gives the lienholder rights to any proceeds from the sale or refinance of the property.

What Is a Mechanics Lien?

A mechanics lien is a legal claim to payment. It’s documented by recording the lien with the recorder’s office in the jurisdiction where the property is located.

Who Can File a Mechanics Lien?

In most states, anyone can complete, sign, and file a notarized lien claim. The risk of criminal punishment for filing a false lien is usually enough to discourage fraudulent claims.

Generally, the following workers in the construction trade file mechanics liens:

• Contractors
• Subcontractors, such as plumbers and electricians
• Building material and equipment suppliers
• Architects
• Engineers
• Surveyors
• Construction workers

Most states don’t require the lienholder to have a written contract with the property owner or developer. However, some states do. For example, general contractors and subcontractors in Massachusetts need a written contract to file and enforce a mechanics lien.

How the Lien Process Works

A party with an interest in the construction project can file a lien by preparing a document that includes the following:

• Property description, such as the address or tax lot number
• Amount owed (typically including an itemized list)
• Names of the property owner and lienholder

The lien is recorded in the property’s title chain and becomes a matter of public record to anyone performing a title search.

Filing Deadlines to Know

Deadlines vary depending on the jurisdiction. For example, direct contractors have 90 days after completing work to file a mechanics lien in California. Your state’s laws will explain how to file a mechanics lien, along with the filing deadlines.

How a Lien Affects Your Property

What happens when a mechanics lien is filed? Liens appear in a title search, creating a cloud on the title. Additionally, when the property is sold or refinanced, the lienholder has priority to the property’s proceeds over the owner.

The lienholder doesn’t need to wait for a sale, though. Most states give the lienholder the right to force a sale through a foreclosure proceeding.

How Owners Can Avoid a Lien

Owners can avoid liens by paying their bills. If a dispute arises, the homeowner can file a lawsuit or invoke the dispute-resolution procedure in the construction contract. Property owners can also negotiate settlements with construction companies and suppliers to avoid or release a lien.

Fighting an Invalid Lien

Unfortunately, illegitimate liens are occasionally put into effect. When this happens, property owners can pursue a quiet title action to remove any invalid liens.

File a Mechanics Lien Using ConsumerShield’s Resources

Using the right form to file a mechanics lien can protect your rights and interests and ensure that you receive payment for your work. ConsumerShield offers a variety of legal document templates. Explore our forms and guides to learn more about mechanics liens.