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:
- 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.
- 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.
- 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
- 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.