Monthly Archives: November 2015

Are you current with the new Lien Laws?

Mechanics Lien laws often become targets of the state legislature and a focus of legislative committees. As many of these laws have been on the books for decades, they quite often need to be updated to address the practice of today’s construction industry. The very word “Mechanics” was used in a genre filled with words like Artisan and Craftsmen. These terms, while once part of the current culture, are no longer commonplace by today’s standards. Today we think of a mechanic as someone who repairs cars; however, when the laws were first written a mechanic was someone who installed or repaired mechanical devices in a home or building. Some states now call this type of mechanics lien a Construction Liens. By using the term Construction Lien, you take away the misleading “Mechanics Lien” title while still addressing the correct purpose and scope of the lien laws.

Lien laws were originally designed to protect property owners. In the past a contractor or anyone helping to improve Real Estate could file a claim against the owner of the property, which they directly, or indirectly, helped to improve. By creating laws which required specific processes to be followed, the owner became more aware of what they needed to do to protect themselves from someone claiming a lien against their property

Today, the lien laws serve to “keep the process honest” for everyone involved, including the Owner, Contractor, Laborer, Subcontractor, Material Supplier and more. Because these lien laws are Statutory, all who seek protection under the lien laws must comply completely with the letter of the lien law. Unlike common law, which may be argued as to fault, or degree thereof. Lien Laws are uncontestable. You either comply or you don’t. There is no such thing as intent or partial compliance.

Every state has their own take as to the structure of their Lien Laws. Some require Preliminary Notices to be served on the Owner, Contractor and Lender at or near the start of the project. While others allow protection within the statute without requiring any preliminary notice. However, the tendency for most states has been to include some type of preliminary notice at the start of a project to allow all parties to share information about the construction project and avoid errors if – and when – it becomes necessary to file a mechanics lien.

For those needing to protect their job-related accounts receivable with Lien Laws on Private Construction or Bond Claims and Stop Payment Notices in Public Construction, it can be challenging to verify the alleged information regarding the project so that the preliminary notice has accurate content and is served on the proper entities, as well as knowing when the law is amended and the correct forms, timelines, and serving requirements are met. To do this, and do it well, some method of tracking the Assembly or Senate Bills in the states where you do business is required. Can you do this yourself? Sure, if you have the staff and your staff has the time in addition to everything else they are required to do. Chances are, however, that this type of tracking and investigative research requires more discipline that is afforded the average employee charged with preparing your preliminary notices.

An attorney can do this for you; the only concern is that you will need to pay attorney rates. By the time you are done using an attorney you may find that your receivables were protected but your profit was not.

It may appear that it is less expensive to do it in house; however, once you account for the task of keeping current with the lien laws, you will realize that you may actually save money by turning to a preliminary notice service provider. If you choose to use a preliminary notice service and the service is experienced and insured, the risk – as well as the process – becomes not only smart but affordable as well.

Michigan Claim of Lien – 10 Keys for Success

If you or your business is providing labor and/or materials to a construction project in the state of Michigan, it is in your best interest to be familiar with the general statutes included in Michigan’s Lien Law. Should one of your clients fail to remit payment on a construction project, you will be responsible for filing the proper documentation to instigate a Claim of Lien. Knowing what is expected of you as a Claimant will make the process much smoother (and more successful). In order to help you determine what documents you will need in order to file a Michigan Claim of Lien, we’ve created a quick list of the basics you should know when filing a Claim of Lien in the state of Michigan.

  1. You only have 90 days after the last date of furnishing labor and/or materials to the construction project to file a Michigan Claim of Lien.
  2. You must include a legal property description (more than just an address) in your Michigan Claim of Lien.
  3. Within 15 days of the recordation of the Claim of Lien, you must serve a copy of the claim, along with any proofs of service filed with the lien, on the owner’s designee, as noted on the Notice of Commencement, by personal service or certified mail (with a return receipt requested). If a designee is not listed on the Notice of Commencement, you may serve the Claim of Lien on the owner or lessee.
  4. The state of Michigan does not allow you to include attorney’s fees, collection costs or other amounts in the Claim of Lien total. (However, should your lien be resolved in court, you have the right to request these cost be added to the judgement).
  5. General contractors, subcontractors (of any tier), laborers and material suppliers have Claim of Lien Rights if they aid in the improvement of real property on commercial projects.
  6. Only licensed contractors and subcontractors have Lien Rights on residential projects if they are licensed as a “residential builder or maintenance and alteration contractor”. Plumbers, electricians and mechanical contractors are exempt from this license requirement.
  7. On residential projects, Lien Rights are granted exclusively to the general Contractor. If he or she is in a direct written contract with the Property Owner.
  8. If you are not in direct contract with the Property Owner, you must file and deliver a Notice of Furnishing within 20 days of first providing labor and/or materials to the project.
  9. General contractors and subcontractors on a residential project must file and deliver a Sworn Statement of Account to the Property Owner. A Michigan Sworn Statement of Account provides a list of all the subcontractors, laborers, and material suppliers the party has contracted with and the amount unpaid to respective parties.
  10. According to Michigan Lien Law, all construction project participants must be licensed in the state of Michigan to claim Lien Rights. If you are unlicensed or your license has expired, your Claim of Lien will be invalid, you may be held liable to the Property Owner for damages, and you may be found guilty of a misdemeanor or felony. This is not something to mess with!

Keep in mind that the above facts are merely a summary of the statutes included in Michigan’s Lien Law. For a full understanding of how you can best secure your Michigan Claim of Lien Rights, hire a Notice of Furnishing and Claim of Lien Service to prepare and serve your Michigan Notice of Furnishing, Sworn Statement of Account, and Claim of Lien. Using such a service will ensure that the proper research is completed so you minimize the risk of forfeiting your Lien Rights due to any misinformation.

CRM Lien Services will thoroughly research and verify all of the information included in your Claim of Lien documents so your Lien Rights are fully protected. We stay current with the changes to the Michigan Lien Law so your notices are prepared according to the latest statutes.

If you’d like to request a proposal for our services, please select: ContactUS

South Carolina Lien Law – Cover all the bases

Have you provided labor or materials to a construction project in South Carolina? Has your customer failed to send payment? If so, you may be thinking about filing a Mechanics Lien; however, before you file a Mechanics Lien to collect payment for labor and/or materials furnished on a construction project in South Carolina, you need to have a basic understanding of the provisions outlined in the South Carolina Lien Law. Failure to comply with a single statute in the law could cause you to forfeit your Mechanics Lien rights and lose the opportunity to collect on unpaid projects. In order to help you understand your Mechanics Lien rights in the state of South Carolina, we’ve outlined the basis provisions you need to be aware of prior to filing and serving a Mechanics Lien.

Keep in mind that this article is not intended to be a full representation of the law but merely a summary of the key facts you need to know about filing a Mechanics Lien in the state of South Carolina.

  1. South Carolina provides Mechanics Lien protection for many parties.
    In comparison to the other 50 states, South Carolina has fairly broad Mechanics Lien protection. According to South Carolina Lien Law, any party who furnishes labor and/or materials used in the “erection, alteration, or repair of a building or structure” or for the “improvement of real property” is entitled to Mechanics Lien protection. This includes contractors, subcontractors, design professionals (engineers and architects), surveyors, laborers, equipment lessors, and – in some cases – even security guards.
  2. All subcontractors are required to file a Notice of Furnishing.
    If you contracted with a party other than the Property Owner (say the General Contractor), you must prepare and serve a Notice of Furnishing Labor or Materials to the General Contractor at the beginning of the project. It’s important to note that this is not a Preliminary Notice; it is a notice to reveal the presence of third tier subcontractors and suppliers on the job. If provided, the Notice of Furnishing acts as a payment defense at the primary level (Owner – General Contractor) rather than the secondary level (General Contractor – Subcontractor).
  3. If you’re a General Contractor, it’s a good idea to file a Notice of Commencement. While it is not a requirement for filing a Mechanics Lien, if you wish to regain payment and receive protection under South Carolina’s Lien Law, you should file a Notice of Commencement. General Contractors can file a Notice of Commencement with the Clerk of the Court or Register of Deeds for the county in which the property is located. The Notice of Commencement must be filed within 15 days of the commencement of the work.
  4. The deadline to file a Mechanics Lien is 90 days.
    Under South Carolina Lien Law, you have 90 days from the date you last provided labor and/or materials to the project to File and Serve a Mechanics Lien unless you receive a call-back to perform additional services or last minute materials. In the case of a call-back, your Mechanics Lien must be Filed and Served within 90 days from the date call-back work was performed. This is a unique policy of the South Carolina Lien Law, as most states typically deem this type of work as not lienable.

These are just a few key provisions included in South Carolina’s Mechanics Lien Law. For a full understanding of how you can fully protect your Mechanics Lien Rights, hire a Preliminary Notice and Mechanics Lien Service to prepare and serve your South Carolina Notice of Commencement, Notice of Furnishing, and Mechanics Lien. Using such a service will ensure that the proper research is done so you don’t have to forfeit your Lien Rights due to any misinformation.

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

If you’d like to request a proposal for our services,ContactUS

Iowa Mechanics Lien-Be Informed

Are you familiar with the changes made to Iowa’s Lien Law within the past year? If you have questions about filing an Iowa Verified Mechanics Lien, you have come to the right place. Here at CRM Lien Services, we like to ensure that you are informed about the laws concerning your business and payment for projects completed.

Last year, Iowa made significant changes to the Mechanics Lien filing process. Starting January 1, 2013, Iowa changed the way contractors, suppliers, and materialman file Mechanics Liens and other notices. Instead of filing a Verified Mechanics Lien with the local county clerk, claimants are required to file their Mechanics Liens and related notices through the Mechanic’s Notice and Lien Registry (MNLR), an online, centralized filing system for posting notices and Verified Mechanics Liens.

In addition to the new filing system, Iowa introduced new notice requirements and statutes for establishing who is entitled to Mechanics Lien Protection under Iowa’s Lien Law. To help clear up some of the confusion brought about by these changes, we have created a quick guide to help you familiarize yourself with Iowa’s Lien Law and the notices required of the Lien Claimant.

Verified Mechanics Lien

If you recently worked on or provided materials for a construction project in Iowa and failed to receive payment for your services, you may be eligible to file a Verified Mechanics Lien. A Verified Mechanics Lien is a way for you to reclaim the amount owed to you; however, in order to preserve your Lien Rights, you must adhere to the deadlines and requirements set forth in Iowa’s Lien Law. In Iowa, a Verified Mechanics Lien must be Filed, Served and Recorded within 90 days from the last date of furnishing of labor and/or materials to the project.

Materialmans Notice

A Materialmans Notice functions similarly to a Verified Mechanics Lien; however, it is filed by subcontractors who work for the General Contractor and supply lumber, plumbing supplies and other materials to the construction site. This notice is usually filed only if the materialman has not been paid. In a typical scenario, the materialman is required to provide the Contractor or Property with advanced notice that he or she intends to file a Mechanics Lien (this is where the Materialmans Notice comes into play). If the Lien is not filed within a specific period of time after the delivery of the materials or supplies, the Mechanics Lien will be invalid.

To further preserve their Lien Rights, some suppliers even send a Materialmans Notice every time they deliver supplies or materials to a construction project. This, however, is not required to maintain your Lien Rights.

Notice to Owner

General Contractors are required to provide the Property Owner with a Notice to Owner at the outset of the project in order to preserve their right to file a Verified Mechanics Lien. The Notice to Owner states that the subcontractors providing labor and/or materials to the project may enforce a Verified Mechanics Lien upon the improved Property if they are not paid (even if they are not in a contractual agreement with the Property Owner).

Notice of Commencement

The final notice anyone filing an Iowa Verified Mechanics Lien should be aware of is the Notice of Commencement. A General Contractor who has contracted with a subcontractor to provide labor and/or materials to the property is required to post a Notice of Commencement of work. In order to be valid, this notice must be Filed and Posted within 10 days of the work beginning.

Keep in mind that this guide is not meant to be an extensive explanation of the Iowa Lien Law but a general summary of your Lien Rights under the law. To fully comprehend your Lien Rights, hire a Preliminary Notice and Mechanics Lien Service to prepare and serve your Materialmans Notice, Preliminary Notice, Verified Mechanics Lien, Notice to Owner and other notices. Using such a service will ensure that the proper research is performed so you don’t have to forfeit your Iowa Lien Rights to due any faulty or misinformation.

CRM Lien Services will thoroughly research and verify all of the information included in your Iowa Verified Mechanics Lien, Materialmans Notice, Preliminary Notice, and Notice to Owner so your Lien Rights are fully protected. We stay current with the changes to the Iowa Lien Law so your notices are prepared according to the latest statutes.

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