What is a Mechanic’s Lien and Who Can File One
With home renovations on the rise during the Coronavirus pandemic, it would almost seem that there’s never been a better time to take on a new client.
But with the boon of more potential clients comes the added risk of delayed or withheld payment, a side effect of the pandemic’s economic effects. If you find yourself in such a situation, you may be required to file a mechanic’s lien.
You may be wondering who can file a mechanic’s lien, what it is, and if you’ll need a lawyer to help you navigate the process. Keep reading to learn about a mechanic’s lien and how it can help you.
What is a Mechanic’s Lien?
A mechanic’s lien is a form of security interest that servers as a claim on a home, business, or plot of land. A lien is a form of “guarantee” for payment, even in a project’s shutdown.
In many states, a lien will prevent a property from being sold. Even where properties with claims against them may be sold, property owners will likely experience difficulty securing a sale (as liens are public record). Any new owner would be held responsible for outstanding liens.
Without a lien, you are only capable of legal recourse against the party that contracted you. If a lien is filed, commercial litigation is possible against any involved party, including the property owners, prime contractors, and any sureties backing the project.
Who can File a Mechanic’s Lien?
Each state has its specific laws on Mechanic’s Liens and the criteria for who may apply for one. Typically, anyone a state defines as a “contractor” may file a lien against a property. It may help to search for your state’s specific mechanic’s lien statute.
In Illinois, for example, state law defines a contractor as a person who has been hired to improve a tract of land or property. A contractor may also be someone who has been hired to manage a property under construction.
Subcontractors are allowed to file for a lien if a prime contractor hasn’t paid outstanding tabs. Doing so will involve a property owner in any disputes, however. Material suppliers may also file for a mechanic’s lien if bills for construction materials have gone unpaid.
What Kind of Work is Eligible for a Lien?
In Illinois, both the work and the materials used must be lienable. The results of your work and the materials you use must also improve or add value to the property.
Construction work such as pouring concrete for a foundation, raising walls, installing permanent fixtures and utilities (HVAC, plumbing, drainage, electrical wiring, etc.), or even landscaping are considered lienable forms of work.
Painting, custodial work (cleaning, maintenance, repairs), and the installation of non-permanent appliances (stoves, dishwashers, etc.) are not considered lienable, however.
Only private properties are eligible for mechanical liens. If you should require a lien for a government project, you may assert it against the funding for the project, but not the property itself.
If you’re uncertain if your work is eligible, it may be prudent to seek the advice of a construction attorney.
How Long Does a Mechanic’s Lien Last?
Most mechanic’s lien statutes will include a stipulation that a lien be enforced by a deadline. Failure to enforce a lien will result in it expiring.
The actual window to file a lien varies by state as well. Some states set an expiration deadline after a lien has been filed, while others set a deadline after work has been completed.
A lien will remain in effect for the duration of any filed suits. Some states allow for extensions to be filed without enforcement, typically to allow a client more time to pay or if you aren’t yourself ready for legal action.
What Does it Mean to “Enforce” a Lien?
To “enforce” a mechanic’s lien is to undertake a lien foreclosure action. Carrying out a foreclosure action will involve beginning construction litigation, though the process is different from a typical lawsuit.
Lien foreclosure actions will typically involve multiple parties; which parties are to be involved will usually be defined by your state’s mechanical lien statute. Typically, any parties with some form of interest in the property in question will be involved.
The process of construction litigation is often lengthy, with lawsuits taking several years to conclude. If a judge rules in favor of a claimant, a foreclosure action will take place. More than likely, the property will be auctioned to raise proceeds to meet any outstanding debts.
Is an Attorney Necessary for a Lien?
You do not need an attorney to file for a mechanical lien. However, you may encounter difficulties when it comes to enforcement if you do not have a lawyer. Individual contractors are permitted under US law to self-represent; firms in most cases are not.
If you’ve been faced with the prospect of delayed payment, or the even more frightening chance of not being paid at all, seek consultation from an attorney. Specifically, seek out a construction law attorney.
Aside from assisting you during legal proceedings if you’re required to begin enforcement of a lien, a construction litigation attorney will be able to assist in the filing of forms and the consideration of which claims to file. A construction lawyer will also be able to ensure that all requirements are met before filing.
Finding a Construction Attorney
If the question of “who can file a mechanic’s lien?” is one you find yourself facing, having a top commercial litigation law firm at your side will ensure that you receive payment.
The Gryzmala Law Offices specialize in construction law and commercial litigation. Serving the Chicago area for over nineteen years, Mark Gryzmala has filed over 2,000 mechanical liens for clients throughout Illinois.
The process of navigating a mechanical lien can be complicated, but it doesn’t have to be. Contact us today for your initial consultation.