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:
“The manufacturing corporation, except in comparatively few instances, no longer represents a protecting care, a parental influence, over its operatives. It is too often a soulless organization; and its members forget that they are morally responsible for the souls and bodies, as well as for the wages, of those whose labor is the source of their wealth.”
—Harriet H. Robinson (1825–1911)
“The dignity to be sought in death is the appreciation by others of what one has been in life,... that proceeds from a life well lived and from the acceptance of one’s own death as a necessary process of nature.... It is also the recognition that the real event taking place at the end of our life is our death, not the attempts to prevent it.”
—Sherwin B. Nuland (b. 1930)
“Communism is inequality, but not as property is. Property is exploitation of the weak by the strong. Communism is exploitation of the strong by the weak.”
—Pierre-Joseph Proudhon (1809–1865)
“If the justices would only retire when they have become burdens to the court itself, or when they recognize themselves that their faculties have become impaired, I would grieve sincerely when they passed away, and you would not feel like such a hypocrite as you do when you are going through the formality of sending telegrams of condolence and giving out interviews for propriety’s sake.”
—William Howard Taft (1857–1930)
“What right have you to hold up this obstacle to my understanding you, to your understanding me! You did not invent it; it was imposed on you. Examine your authority. Even Christ, we fear, had his scheme, his conformity to tradition, which slightly vitiates his teaching. He had not swallowed all formulas. He preached some mere doctrines.”
—Henry David Thoreau (1817–1862)
“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)