Claim of Mechanics Lien Template

As a contractor, you know just how much work goes into a project. And when a client refuses to pay, it’s a threat to your livelihood. Fortunately, you have recourse when this happens: you can file a claim of mechanics lien.

What Is a Claim of Mechanics Lien?

A mechanics lien is a legal remedy that professionals may use when a client fails to pay for work done on a property. It creates a legal “hold” on the property until the professional is paid.

How Filing Affects the Property

A mechanics lien creates a cloud on the title. Because the lien stays attached until it’s paid, most buyers won’t purchase the property until it’s resolved. In some cases, a lienholder may even be allowed to force a sale of the property to collect.

When You Need to File a Claim

If a payment deadline passes with no payment from the project owner, you need to file your claim. This usually must be done in the county where the project is located.

Required Information in Your Claim

In most areas, your claim must include the following information:

• Your name and address
• Whether you’re the prime contractor or a subcontractor
• The name of the person you have a contract with
• The owner of the property
• A full legal description of the property
• The dates you worked on the property
• The exact amount still owed to you
• A sworn verification that the amount due is accurate

Before filing a claim, always check state and local requirements to make sure it’s complete.

State-Specific Deadlines and Requirements

Some states require you to send a preliminary notice before starting work to preserve your right to file a lien. That notice tells the property owner that you may file a mechanics lien in the event of non-payment.

Many states set deadlines for filing your claim. For example, in Tennessee, you must file your claim within 90 days of project completion or abandonment.

Your state may or may not have a standard mechanics lien claim form. Using the templates in a mechanics lien kit can help you make sure you meet all requirements

Step-by-Step Filing Process

Although the process differs from state to state, these are the general steps for filing:

1. Send a preliminary notice if required.
2. Keep work and payment records throughout the project.
3. If the client doesn’t pay, prepare a claim according to your state’s guidelines.
4. Submit the claim to the recorder of deeds in the county where the project is located.
5. Serve the lien paperwork to the property owner.

After you file, the owner may then negotiate lien payment. If they don’t, you can start the process of filing a lawsuit.

Protecting Yourself With a Valid Claim

Using the right forms isn’t just a formality. If you use the wrong forms to file a claim of mechanics lien, you could run into delays or have your claim dismissed.