Monthly Archives: October 2014

Four Pitfalls to Avoid When Filing Your Ohio Affidavit of Mechanics Lien

Today’s business owners know and understand the struggle of getting paid for work done or services provided all too well. As economic uncertainty mounts, the importance of protecting your ability to secure payment through a Mechanics Lien is more important than ever. To help you secure your Lien Rights in the state of Ohio, please examine this short list of the top four mistakes claimants make when attempting to secure a valid mechanics lien. Avoiding these pitfalls is a great start to collecting your job related accounts receivable:

  1. Failure to understand and preserve your Lien Rights.
    In order to secure your accounts receivable, you need to have a clear understanding of your Lien Rights under Ohio’s Lien Law and the steps you need to take to preserve those rights. In the state of Ohio, a construction project “starts” when the Property Owner Files and Records a Notice of Commencement. To be valid, an Ohio Notice of Commencement must include all of the necessary information, including a legal description of the Property, a brief description of the improvement, the name and address of the contractor and Property Owner, the date of the first contract, and the name and address of the lending institution(s).The Notice of Commencement must be Recorded in the county where the construction project takes place, posted in a visible location at the project site, and Served upon the original Contractor. The Owner has 10 days to provide the Notice of Commencement. Should the Property Owner supply incorrect information or fail to follow the process as outlined, he or she is liable for expenses related to obtaining the correct information, as well as for any loss of Mechanics Lien rights as a result of the incorrect information.Once the Notice of Commencement has been filed, the subcontractor or materialman should File and Serve a Notice of Furnishing within 21 days of the first furnishing of labor and/or materials to the project. While filing a Notice of Furnishing is not required in the state of Ohio (especially if a Notice of Commencement has not been filed), subcontractors and materialmen are always best served to make it a habit of promptly filing a Notice of Furnishing to ensure their full Lien Rights.
  2. Failure to meet the deadline for Filing, Serving and Recording an Affidavit of Mechanics Lien.
    It’s important to be aware of the deadlines involved in filing an Affidavit of Mechanics Lien and follow them accordingly. On all commercial projects, a claimant has 75 days from the last day of furnishing labor and/or materials to file an Affidavit of Mechanics Lien. For residential projects, a claimant has only 60 days from the last day of furnishing labor and/or materials to file the Affidavit of Mechanics Lien.
  3. Leaving out important information in the Affidavit of Mechanics Lien.
    Unknowingly leaving out information or providing misinformation in an Affidavit of Mechanics Lien will invalidate your claim and cause you to lose your Lien Rights. To be valid, an Affidavit of Mechanics Lien must include:

    • The amount owed to the claimant
    • A description of the property
    • The name and address of the Property Owner
    • The name and address of the person for whom the work or materials were provided
    • The name and address of the Lien claimant
    • The first and last dates that work was performed or materials were supplied to the project
  4. Allowing the Mechanics Lien to expire.
    In the state of Ohio, an Affidavit of Mechanics Lien may be valid for up to 6 years, unless a Notice of Commence Suit is served upon the Lien claimant. If a Notice of Commence Suit is served upon the claimant, Lien Rights will expire 60 days after service if a lawsuit has not been filed.

­­­­­­These provisions are not an exhaustive list of every detail included in Ohio’s Lien Law and should not be taken as such. To avoid the unforeseen complications in this process you may be best to use an experienced Preliminary Notice and Mechanics Lien Service to prepare and serve your Affidavit of Mechanics Lien, Notice of Furnishing, Notice of Commencement and other notices. Using an accomplished service will ensure that the proper research is performed so you do not run the risk of loosing your Ohio Lien Rights due to any missed deadlines or inaccurate information.

CRM Lien Services will thoroughly research and verify all of the information included in your Affidavit of Mechanics Lien, Notice of Furnishing and Notice of Commencement so your Lien Rights are fully protected. CRM keeps current with the changes to the Ohio Lien Law so your notices are prepared according to the latest statutes.

If you would like a proposal for our services: Funds-Trapping-Notice-Texas

Want to avoid Unpaid Construction Debt in Minnesota? Here’s a few key facts that are sure to help

If you are having trouble collecting payment on a recent construction project performed in the state of Minnesota, you may be thinking about filing a Mechanics Lien Statement. While filing a Mechanics Lien Statement can certainly expedite the collection process and move those who owe you money into payment, you need to be aware that the process for filing a Mechanics Lien Statement in the state of Minnesota is governed by state statute and must be administered with precision. Minnesota, not unlike many other states, has strict requirements when it comes to defining who can and cannot file a Mechanics Lien Statement and how it must be filed. Failure to comply with just one part of the statute could result in the loss of your Lien Rights.

While we cannot share all of our experiences in one article, we can provide you with a summary of key points to help you on your journey to collecting payment from your Minnesota construction projects. Here are six things you should know before filing a Minnesota Mechanics Lien Statement:

  1. Minnesota Statute allows 120 days from the last date you provided labor and/or materials to the project to file a Minnesota Mechanics Lien Notice. The deadline to File, Serve and Record a Mechanics Lien Statement in Minnesota is hard and fast; miss it, and you miss your chance to use the most effective tool for collecting construction related accounts receivables in Minnesota.
  2. Unless you are a supplier to a supplier, you are granted Mechanics Lien Rights in the state of Minnesota. Any party who furnishes labor, materials or services at the request of the Real Property Owner, Owner’s Agent, General Contractor, or Sub-Contractor on a construction projects has Mechanics Lien Rights in the state of Minnesota. The Minnesota Lien Law also allows suppliers to file a Mechanics Lien Statement even if their supplies are not incorporated into the project as long as they were provided in good faith. Suppliers to suppliers, however, are not protected under Minnesota’s Lien Law.
  3. General Contractors are required to provide the Real Property Owner with a Contractor’s Pre-Lien Notice. A Minnesota Contractor’s Pre-Lien Notice must be sent via certified mail, or personally delivered, within 10 days after the work is agreed upon by the General Contractor and Property Owner.
  4. If you are not in direct contract with the Property Owner, you are required to file a Mechanics Lien Claimant’s Notice within 45 days of first furnishing labor and/or materials to the project. Failure to file and serve this notice to the Property Owner will result in the forfeit of your Lien Rights. This is quite similar to the Preliminary Notice or Notice of Furnishings used in other nearby states
  5. Unlike most states, Minnesota does allow you to claim interest in the total amount of your Mechanics Lien Statement. You cannot, however, include attorney’s fees, “soft costs”, surety bond premiums, or the costs of extra materials unauthorized by the Property Owner.
  6. In some cases, Minnesota Mechanics Lien Statements can take priority over a mortgage. Because Mechanics Lien Statements relate back to the start of work (legally defined as the first date of actual physical improvement on the Property), they can take priority over a mortgage if the first materials or labor were furnished prior to the date the mortgage was originally filed.

­­­­­­­­­­­­­These provisions are just a few included in Minnesota’s Lien Law. To skip the hassle of digesting the Minnesota Lien Law Statute, hire an experienced Preliminary Notice and Mechanics Lien Service to prepare and serve your Contractor’s Pre-Lien Notice, Mechanics Lien Claimant’s Notice, and Mechanics Lien Statement. Using a professional service will ensure that the proper research is performed and your notices are valid and will meet the test of the Minnesota Mechanics Lien Laws.

CRM Lien Services will thoroughly research and verify all of the information included in your Contractor’s Pre-Lien Notice, Mechanics Lien Claimant’s Notice, and Mechanics Lien Statement so your Lien Rights are fully protected. CRM keeps current with the changes to the Minnesota Lien Law so your notices are prepared according to the latest statutes.

If you’d like to request a proposal for services: Funds-Trapping-Notice-Texas