Are you protected by the Lien Laws? – part one

First answer this question:

 

Did I provide materials, services, equipment or labor to a “Work of Improvement” on REAL PROPERTY? This questions begs for a basic understanding as to why the mechanics lien laws exist. The keywords in this sentence are #1 REAL PROPERTY and #2 WORK OF IMPROVEMENT

#1 Real Property is the same as saying Real Estate. i.e.: Land, Building, House, Road, Physical Structure. Many ways to say the same thing. It must be Real Property to be eligible for protection under the Lien Laws.

#2 Work of Improvement. Not work to maintain the condition of Real Property. But work that will actually add value to the Real Property.

  • Examples: A Concrete Patio with a Wood Shade Structure which is “Built On” to the House or Building.
  • Another Example: Converting an unimproved lot by adding plants, grass, underground sprinkler systems, etc. These examples convey improving the value of the Real Property by adding physical improvements which did not previously exist.

So what about replacing a damaged or worn roof? Does this add value? The answer is: Yes. The worn or damaged items diminish the value of the Real Property. So replacing them with new products not only maintains the value but may also increase the value of Real Property.

An example of this is as follows: Suppose that you are considering the purchase of a 25 year old house and you can choose from two identical or similarly priced houses. Only one has the original roof which is now 25 years old and the other has a recently replaced roof that is only three years old. Which house may have greater value? While both may have functioning roofs, the house with the newer roof will most likely last longer than the house with the aging roof. Therefore, this replacement roof both maintains and adds value to the Real Property.

So the key here is to understand what improves or adds value to a real property and also what may simply maintain the value of real property.

Example: Lawn Maintenance, Window Cleaning, Replacing Lightbulbs, These examples and many like them fall under a category known as maintenance. There are NO LIEN LAWS which will allow you to claim a mechanics lien for providing maintenance to real property.

Now it is also easy to add onto any of these examples and create a right to claim a lien.

You may plant some new shrubs on the same day you maintain the lawn. Naturally you will charge more for the shrubs and the labor to plant them. So now you may be able to protect the part of the invoice which identifies the shrubs as eligible for protection under the lien laws. Same for window cleaning if you should replace some damaged glass or provide tinting for the windows. Perhaps the light bulb replacement may include upgrading to low energy bulbs or adding new or replacement fixtures. The key is to understand what can be protected under the lien laws and what cannot.

There is a lot more to this discussion. However, it is to much to cover in this blog article. If you want to learn more. Watch for “Are you protected by the Lien Laws – Part Two”

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