Every person working with construction sites knows that if they want to have their accounts to be secured and their company payment to be virtually guaranteed, they will need to file a mechanics lien. This way, you will be certain that by the end of every project, your company will receive the required payment for it.
That being said, there is also a question of logistics here: how do you even file a mechanics lien claim? What steps do you have to go through? Well, the good news is that the process is relatively simple, particularly if you do your research. The process might differ slightly depending on the state that you are in – but it will all boil down on the following steps.
Find Out the Deadline
When you file a mechanics lien, the first thing that you will have to do is to figure out when the deadline is – and use it to give yourself some time. A delay can always happen when it comes to receiving payment for construction – and they can occur for a variety of reasons as well (e.g. misappropriation of funds, contractual clauses, etc.). In most cases, it’s actually more tempting to leave the filing for later, until all these clauses resolve themselves – particularly if your client is promising to pay you in the future.
However, you need to understand that you have a limited timeframe to file this claim – so you should know exactly when the deadline is. This will give you enough time for you to file your claim and get everything ready. Once you find out when the deadline is, you need to give yourself some extra time to file that claim – mostly because many things can go wrong during the filing process.
Fill the Form
You have now figured out the deadline and gave yourself enough time to consider everything out. The next step after that should be rather obvious: you have to make a draft of your mechanic’s lien claim. While the step here is clear on what you should do, that doesn’t make it an easy one.
First things first, you will need to find a mechanic’s lien form. Bear in mind that there isn’t anything such as a universal lien form – and you should definitely be concerned if you do find a “one-size-fits-all” option. The form may vary depending on the state that you are in, and it might also hold differences depending on the project that you are about to undertake.
Here are the steps to properly fill the mechanic’s lien form. By adding every necessary piece of information on the correct form, you will ensure that your claim won’t be rejected without a second glance. Here is what you will have to do.
- Identify Yourself: While this might seem simple, you may be surprised how many people actually get this wrong. Make sure that your full name is there, along with your contact information and your address. If you are filing a mechanics lien for your company, make sure that you add its complete, legal name.
- Identify the Owner(s) of the Property: The mechanic’s lien may be filed on the actual property, but the claim will need to include the name of the property owner as well. If the property has more owners, you should include all of them. Sometimes, it might be rather difficult to find all the names, but it is a mandatory step.
- Describe the Materials or Labor Provided: In order to get paid for a project, you also need to describe it. It does not have to be a full list with every excruciating detail, but you do need to give a summary to describe exactly what the project entails. That being said, try not to be too vague, and give out the details to offer the reader a good sense of what you did there. Many mechanic’s liens are rejected simply because there didn’t seem to be enough detail.
- Include the Hiring Party: Here, you will have to provide the contact information of the ones that hired you. If the property owner was the one that hired you, add their name and contact information.
- State the Lien Claim Amount: At this point, you will need to specify how much money was unpaid on the project. If the contract does not include any fixed amounts, then you may go on good faith and include an estimate. You may not want to overestimate the sum, as you may want to be charged with a fraudulent mechanic’s lien.
- Give the Dates of Labor: You should also include precisely the first and the last dates on which you provided labor or materials. While the start date is always clear, the end one is not always. In this case, you might want to come forward with an estimated date when you believe the project will be completed:
- Describe the Property: The description does not have to be clad in detail – but it needs to be sufficient enough for the property to be identified. The simple address won’t be enough, which is why you may want to give a few details that make them say “yes, this is indeed the property”. You won’t receive a penalty for adding too much information, but you will be penalized if the information is too little.
- Confirm Preliminary Notice: You do not need to add a separate document. All you have to do is write a line in which you certify that preliminary notice was filed on a specific date for a specific state. Even if you were not required to send that notice, you will have to specify as to why that wasn’t necessary.
- Verify & Sign: Last but not least, the mechanic’s lien will also need to be verified and signed. Some states will require you to notarize the mechanic’s lien, whereas others will not.
Once you find the blank form, you have succeeded in the first step. Now you just have to fill out the form completely and without any mistakes. A mechanic’s claim will have to be filled out accurately, exactly in the way that it is supposed to be. One common mistake, believe it or not, is that the one claiming the lien fails to properly identify themselves or the project that they are representing.
File the Claim
Now that you did all your research and filled the form correctly, it is time for you to actually file the claim. All mechanic’s lien claims need to be filed with a clerk office or a recording. It does not matter when you finish your draft or serve the actual lien claim – but it’s the date of the actual filing that will determine whether you managed to file it on time or not. This is why you need to be extra careful with the filling time.
It is quite easy to bring a lien claim document to the clerk office of the recorder – but what you will want to be careful about is bringing your claim to the right recorder. A very common mistake is to file that claim in the wrong county or with the incorrect recording office.
Bear in mind that every county recorder will feature its own requirements in regard to margins, font size, paper size – and even the way in which you deliver the claim. For example, it is not always recommended to mail your claim in, as you might not get prompt services.
Get the Claim Served
You are nearly done! All you have to do now, after you have prepared and recorded your mechanic’s lien, is to serve it. In other words, you will need to get the claim served on the owner of the property. Bear in mind that this should not be delayed, as the service requirement for this might have a timeframe of about 5 to 10 days.
In most states, you should be able to serve the lien by the U.S. Certified mail. However, bear in mind that there are also certain states (such as Pennsylvania) that will require personal service via the sheriff of the county.
Once the claim is served, you are completely done with everything. Keep in mind that this claim will not remain valid forever. In this regard, you might want to monitor the mechanic’s lien foreclosure deadline. This way, you will make sure that one out of two things happens: you either get paid, or you take foreclosure action before the lien reaches its expiration date.
The Bottom Line
Filing a mechanic’s lien is not that difficult – but you need to pay attention to the details. Many liens were rejected simply because there weren’t enough details provided – which is why you might not want to be stingy on them. Make sure that you file them in the right place, and keep an eye out on the deadlines. This way, you will be sure that you are not missing out on anything.