Understanding the Law: Mechanics Lien

Overview
Mechanic’s lien generally seeks to protect the interests of parties who contribute to the improvement of property against unfair enrichment of property owners. The law also safeguards interests of suppliers as well as workers who provide services which lead to the improvement of property.

Mechanic’ lien law is generally technical and complex.
Any party that supplies services and/or materials to improve personal or real property that belong to another party ought to learn the fundamental rights provided by the law.

Privity of contract
Privity of contract usually exists between contractual parties. In this case, even though privity of contract may not directly exist between the property owner and a supplier of services/ goods, a supplier has the liberty of imposing a mechanic’s lien on the proprietor whose personal or real property has been improved as a direct result of the supplied services/ goods.

Who can assert the lien?
Parties who can assert mechanic’s lien against the owner of property include (but are not limited to) the following: contractors, surveyors, subcontractors, engineers, suppliers of materials, architects, equipment renters as well as workers.

Amount
Generally, a claimant who wishes to enforce lien is legally entitled to the contract price or reasonable value of materials and/or services that have been supplied to that project. In most legal jurisdictions, the amount of mechanic’s lien depends on the amount that has already been offset by the owner, among other factors.

Notice of lien
Ideally, a supplier of materials ought to provide the property owner with notice shortly after, or just before supplying materials for the first time. If the supplier fails to do this for one reason or another, the claim may be rendered voidable/ unenforceable.

Priority of lien
Are you aware that in most states, mechanic’s lien claim relates back to the day when construction on the property first began? In other jurisdictions, it goes back to the day when the supplier first delivered materials or labor to the project site.

Are you also aware that a mechanic’s lien ranks above other liens such as construction loans? However, in other jurisdictions, it merely provides rights that are subordinate and subject to already existent liens.

Notice of commencement
This is an important document that the property owner records/ files to give official notice about commencement of the project. It can also be filed by the general contractor.

Preliminary notice
Mechanics lien can only be enforced if the claimant officially provided notice to the property owner as well as other concerned parties about commencement of work.

It should give a declaration that a lien claim will be filed if the claimant fails to receive all the payments due.

For more information about mechanics lien, visit www.mechanicslien.com

 

 

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