Renovations

If you have contractors and subcontractors doing work on your property, you may find yourself dealing with a mechanic’s lien. Also known as a “property lien” or a “construction lien,” a mechanics lien is a legal claim made against your property which seeks to compensate individuals for their work and materials supplied for your project. 

Before an individual can file a lien against your property, he or she must provide you with what is known as a “Preliminary Notice.” The purpose of this notice is to advise a property owner that the contractor has the right to place a lien against your property if he or she is not paid. These notices can be sent up to 20 days after a subcontractor begins working on your property or after a supplier provides material for your project.

Why Would Someone File a Mechanic’s Lien?

A contractor, subcontractor, supplier or laborer who was involved with the improvement of your property, for instance adding or remodeling a pool, may file a mechanic’s lien against you. This gives them the opportunity to take you to court and sue you for what they believe you owe. If the court finds that the lien is valid, homeowners can be forced to pay double the amount owing. In some instances, the court may order you to sell your home in order to satisfy the lien.

What if the Contractor Is at Fault?

A homeowner may still find themselves dealing with a potential mechanic’s lien if a general contractor does not pay his or her subcontractors and suppliers. Subcontractors and suppliers have the right to file a lien directly onto any property owned by you and which they are providing services or materials. The goal is usually for the homeowner to then put pressure on the general contractor to pay his or her subcontractors or suppliers.

What Items Can be Included In a Lien?

What can and cannot be included in the amount of a lien will vary from state to state. Some costs which can typically be included in a mechanic’s lien include:

• Labor costs (i.e. hourly fee)
• Cost of materials (i.e. concrete, rebar, tiling.)
• Cost of services  (cost of renting equipment to complete the job)

Items which typically cannot be included in the lien amount include:

• Attorney’s fees
• Punitive damages
• Emotional distress

Any items which do not benefit the value of the property most often cannot be included in a mechanic’s lien.

How Can I Protect Myself Once Given a Preliminary Notice?

If you have been served with a Preliminary Notice, there are a few steps you, as a homeowner, can take to protect yourself:

1. Know who’s working on your property.

The first step to take is to request a list of all of the subcontractors and suppliers of materials that will be working on your project. Ask your contractor when the subcontractors will be starting work and when goods or materials will be received.  

2. Use joint checks.

Paying with a joint check is a great way to prove that you are paying everyone who is working on or providing materials for your project. The next time your contractor asks you to pay a subcontractor or supplier who has provided you with a Preliminary Notice, write a joint check made out to both the contractor and the subcontractor/material supplier.

3. Consider seeking legal advice.

Because local laws surrounding mechanic’s liens vary from county to county, it is a good idea to seek advice from a local lawyer who practices construction law.