How To File A Construction Lien

Filing a construction lien, also known as a mechanic's lien, can be a crucial step in ensuring that contractors, subcontractors, suppliers, and other parties involved in a construction project get paid for their work. A construction lien serves as a legal claim against a property when payment has not been made for labor, services, or materials provided to improve that property. In this Miller, Ross & Goldman blog post, we'll walk through the general steps required to file a construction lien and explain what's involved at each stage.

Understand the Lien Laws in Your State

Construction lien laws vary significantly from state to state, so it's important to understand the specific legal requirements in the state where the project is located. These laws will dictate everything from who is eligible to file a lien to the deadlines for filing and the notices that must be given in advance. Missing a deadline or failing to follow the correct process can invalidate your lien, so be sure to familiarize yourself with the rules that apply to your situation.

Provide Preliminary Notices (If Required)

In many states, contractors, subcontractors, and suppliers are required to provide a preliminary notice, or a "Notice to Owner," at the beginning of their involvement in a construction project. This notice informs the property owner and the general contractor that you are working on the project and may file a lien if you are not paid. The purpose of this step is to make the owner aware of your rights and to create transparency around the project’s payment process.

The timeframe for sending this notice can vary, and failing to provide a preliminary notice within the required time could disqualify you from filing a lien later. In some states, the preliminary notice must be sent within a specific number of days after the first day of work or after materials are supplied.

Track Deadlines for Filing the Lien

Each state has strict deadlines for when a lien must be filed, known as the "lien filing period." The deadline typically begins after your last day of work or the last day that materials were supplied to the project. This deadline varies by state and can range from a few months to up to a year, depending on the state’s laws.

Keep track of this timeline carefully, as missing the deadline to file your lien could prevent you from recovering the money you are owed.

Prepare the Lien Document

Once you're ready to file a construction lien, you'll need to prepare the necessary legal document. The document typically includes the following information:

• The property owner's name
• A description of the property (legal description is preferred)
• The amount owed to you
• A description of the work performed or materials supplied
• The dates when the work or supply of materials began and ended
• Your name and contact information

Each state may have additional requirements regarding the content and formatting of the lien document. It’s important to ensure that the lien document complies with the legal requirements in the state where the property is located.

File the Lien with the County Recorder or Clerk

Once the lien document is prepared, it must be filed with the appropriate government office, usually the county recorder or county clerk in the county where the property is located. There may be filing fees associated with submitting your lien, which vary by jurisdiction.

This filing officially places the lien on the property’s title, making it publicly known that a claim for unpaid work or materials exists. This can make it difficult for the property owner to sell or refinance the property until the lien is resolved.

Serve a Copy of the Lien on the Property Owner

After filing the lien, many states require that you serve a copy of the lien on the property owner and, in some cases, the general contractor. This is typically done via certified mail or personal service, depending on the state’s requirements.

The property owner must be notified of the lien within a certain timeframe, usually a few days after the lien is filed. This notice serves as a formal reminder that payment is due and that legal action may follow if the lien is not satisfied.

Enforce the Lien (If Necessary)

If the property owner fails to pay the amount owed after the lien has been filed, the next step may be to enforce the lien through legal action. This is commonly referred to as "foreclosing on the lien." The process of enforcing a lien varies from state to state but generally involves filing a lawsuit to force the sale of the property to collect the unpaid funds.

It's important to note that there is typically a strict deadline to enforce a lien—usually within one year of filing. If you fail to take legal action within the allowed timeframe, your lien may become unenforceable, and you could lose your right to recover the money owed.

Release the Lien Upon Payment

Once payment has been received, either voluntarily or through legal action, it’s your responsibility to release the lien. A lien release is a legal document that removes the lien from the property’s title, allowing the property owner to sell, refinance, or transfer ownership of the property.

The lien release must be filed with the same office where the lien was originally recorded. In some states, there are penalties for failing to release a lien within a certain period after payment has been made.

Need Help Collecting On A Construction Lien? Miller, Ross & Goldman Can Handle It

Filing a construction lien can be a powerful tool for ensuring you are paid for the work and materials you provide on a construction project. However, the process can be complex, with specific requirements that vary by state. By understanding the steps involved—such as providing preliminary notices, meeting filing deadlines, and following up with enforcement if necessary—you can protect your rights and increase the likelihood of recovering unpaid amounts.

If you need assistance with collecting debt on a construction lien or navigating the legal complexities surrounding unpaid construction work, the experienced team at Miller, Ross & Goldman is here to help. Contact us today to learn more about our construction lien services and how we can help your business secure the compensation you deserve.