Protecting Real Property From Burdens Imposed By A Mechanic's Lien
Often a mechanic’s lien is discovered long after it's been filed in the public records, but by taking a few proactive measures, property owners can ensure their properties are protected from the burdens imposed by such mechanic’s liens.
Notice of Commencement: File a Notice of Commencement before beginning any home construction or remodeling project. Record the form with the Clerk of the Circuit Court in the county where the property being improved is located. Post a certified copy at the job site, too. The Notice notes the property owner’s intent to begin improvements, the location of the property, description of the work and the amount of bond (if any). It also identifies the property owner, contractor, surety, lender and other pertinent information.
A property owner who fails to record a Notice of Commencement or incorrect information on the Notice could result in having to pay twice for the same work or materials. Request a list of all subcontractors and suppliers who have a contract with the contractor to provide services or materials to the property.
Releases of Lien: Prior to making any payment, the property owner should receive a Release of Lien from every supplier, contractor and subcontractor, which covers the materials used and the work performed on the project. The Release of Lien is a written statement that removes the property from the threat of lien. If the contract requires partial payments be made before the work is completed in full, then get a Partial Release of Lien covering all workers and materials used up to that point in time.
Before final payment, obtain an affidavit from the contractor that specifies all unpaid parties who performed labor or services, or provided materials to the property. Make sure the contractor obtains releases from all of these parties before making final payment.
Notice of Termination of Notice of Commencement: At the end of the project and after the contractor is paid in full and obtained all of the necessary Releases of Lien and affidavits as described above are obtained, file a Notice of Termination of Notice of Commencement with the Clerk of the Circuit Court in the county where the property being improved is located.
Once a Lien has been Filed: States typically have a process by which the land owner may challenge the claimant's prima facie entitlement to the liens on grounds such as proper identification of the property, compliance with notice requirements, and timing. If the lien claim survives those challenges, the owner may "bond off" the lien by filing a surety bond with the court in which the lien action has been intiated. This, in effect, frees the property from the lien and allows for sale of the property. The ability to bond off the lien is especially crucial where developers desire to proceed with the sale of newly built homes, which would otherwise remain unsold and unoccupied during the lien litigation process.
Read more about this topic: Mechanic's Lien
Famous quotes containing the words protecting, real, property, burdens, imposed and/or mechanic:
“Never has any one been less a priest than Jesus, never a greater enemy of forms, which stifle religion under the pretext of protecting it. By this we are all his disciples and his successors; by this he has laid the eternal foundation-stone of true religion; and if religion is essential to humanity, he has by this deserved the Divine rank the world has accorded him.”
—Ernest Renan (1823–1892)
“The real persuaders are our appetites, our fears and above all our vanity. The skillful propagandist stirs and coaches these internal persuaders.”
—Eric Hoffer (1902–1983)
“In the Greek cities, it was reckoned profane, that any person should pretend a property in a work of art, which belonged to all who could behold it.”
—Ralph Waldo Emerson (1803–1882)
“The sacred obligation to the Union soldiers must not—will not be forgotten nor neglected.... But those who fought against the Nation cannot and do not look to it for relief.... Confederate soldiers and their descendants are to share with us and our descendants the destiny of America. Whatever, therefore, we their fellow citizens can do to remove burdens from their shoulders and to brighten their lives is surely in the pathway of humanity and patriotism.”
—Rutherford Birchard Hayes (1822–1893)
“The poverty of our century is unlike that of any other. It is not, as poverty was before, the result of natural scarcity, but of a set of priorities imposed upon the rest of the world by the rich. Consequently, the modern poor are not pitied ... but written off as trash. The twentieth-century consumer economy has produced the first culture for which a beggar is a reminder of nothing.”
—John Berger (b. 1926)
“He may have seen with his mechanic eyes
A world without a meaning, and had room,
Alone amid magnificence and doom,
To build himself an airy monument”
—Edwin Arlington Robinson (1869–1935)