Whether you’re brand new to the lien process or you’ve been around the block, it’s always nice to brush up on the basics. Here’s what you need to know to better understand how everything works.
*Remember, these terms and resources are not legal advice. Please consult an attorney for legal advice.
In the construction industry, a Mechanic’s Lien attaches to real property. It’s a public way of stating that a contractor or supplier has not been paid and that they still own their portion of the property. Mechanic’s liens may be followed with a lawsuit to foreclose the property. There are many technical requirements that range from state to state. Often, if a contractor or supplier does not follow the statutory requirements, they will not have the right to record a lien.
These notices are often required in order to retain lien rights against a property/project. They are typically early notification letters that inform interested parties of your involvement on the project. Many states have statutory language and specific timeframes in which these notification letters must be sent. When not required by state statute, sending an early notification letter often gives the contractor or supplier the upper hand as owners and contractors are aware of their involvement on the projects.
This document is a warning letter that is often mailed out prior to recording a lien. It is not required in all states. Some states require this notice to be recorded with the local county recorder/clerk. It is intended to give the owner of the property the opportunity to pay the amount owed prior to a lien being recorded.
A stop notice is a useful document that essentially stops the flow of money to the general contractor and requires the owner of the property/project to withhold the amount owed to the contractor or supplier. It is an official way to bring attention to the amount owed to the contractor or supplier and require the owner to pay attention. Not all states recognize a stop notice.
A waiver is a glorified receipt. It is a document that states you have been paid (or will be paid) for a certain amount of money or through a particular date. Once paid the contractor is essentially waiving their rights to a mechanic’s lien. Not all States recognize waivers as binding, but most do. Keep in mind that certain waivers are binding regardless of payment. Understanding waivers and how they affect your payments is important – Remember that each State is different.
This is typically a recorded document and it releases the mechanic’s lien from the property. Lien Releases are most often used once payment has been received and the lien is no longer needed. Releasing a lien once a contractor has been paid is important – depending on the State, there may be consequences for leaving a Mechanic’s lien on a property if you’ve already been paid.
We provide several opportunities for our clients to get a more in-depth understanding of the lien process and have become an invaluable resource to our clients. As a courtesy to our customers, we host lien law seminars several times per year, we host in-office lunch-and-learn classes, and we even do one-on-one meetings.
During these meetings you can expect to review:
+Preliminary Notices (Preliens) and Liens
+Time Frames to Follow
+Overview of Who has the Right to Prelien
+Lien Waivers VS. Lien Releases
+Conditional VS. Unconditional Waivers
+Ideas, Forms, and Solutions
+Question and Answer Period
We look forward to these opportunities to meet with you. We are dedicated to helping make sure you get paid, this brief meeting will arm you with the information you need. We truly appreciate your business and we are constantly striving to find ways to improve our service to you, if you’d like to schedule a one-on-one meeting or would like more information about our upcoming educational opportunities you can call us at (480) 380-3434 or email email@example.com