If contractors and suppliers are not paid for their work on a construction project in Alabama, they can file a mechanics lien Alabama to ensure they receive their payment. A mechanics lien is a legal mechanism that grants the unpaid party a security interest in the property.
At CRM Lien Services, we specialize in ensuring that you get paid quickly and reliably. We can prepare and file mechanics liens for you, taking into account Alabama mechanics lien law and state-specific rules and regulations.
This page outlines the rules, requirements, and deadlines necessary to file a mechanics lien in Alabama.
Key Takeaways
- Eligibility and Deadlines: Alabama mechanics lien rights are available to contractors, subcontractors, suppliers, equipment rental companies, and architects, with specific filing deadlines depending on the claimant’s role: 6 months for original contractors, 4 months for subcontractors and suppliers, and 30 days for laborers.
- Essential Information and Notarization: An Alabama Statement of Lien must include detailed information such as the claimant’s name and address, property owner’s name and address, demand amount, and a description of furnished labor/materials. Additionally, the lien must be notarized to be valid.
- Preliminary Notices and Protections: While not mandatory, sending a Notice to the Owner before furnishing materials can enhance lien rights. Failure to send this notice limits lien protection to the unpaid balance when serving the Notice of Unpaid Balance (NOI) on the property owner.
Who Can File an Alabama Mechanics Lien?
Mechanics lien rights are widely accessible to Alabama construction businesses, including contractors, subcontractors, sub-subcontractors, suppliers, equipment rental companies, and architects. However, surveyors and suppliers to suppliers are not covered under Alabama lien law.
What Is the Deadline to File an Alabama Mechanics Lien?
The deadline to file a mechanics lien in Alabama varies based on the claimant’s role in the project:
- Original contractors must file within 6 months after their last date of providing labor and materials.
- Subcontractors and suppliers must file within 4 months after their last date of providing labor and materials.
- Laborers must file within 30 days after their last date of providing labor.
Actions to enforce a lien must commence within six months after the entire indebtedness secured by the lien matures.
What Information Should Be Included in an Alabama Mechanics Lien?
An Alabama Statement of Lien must adhere closely to the format specified in Ala. Code §35-11-213 and include the following information:
- Claimant’s name and address
- Property owner’s name and address
- Amount of the demand after all just credits have been applied
- Description of labor and materials furnished
A verified lien statement must include detailed information and be filed with the Probate Court within specified time frames to ensure the lien remains enforceable against the property.
Note: “No error in the amount of the demand or the name of the owner or proprietor shall affect the lien.”
Does an Alabama Mechanics Lien Need to Be Notarized?
Yes, an Alabama statement of lien must be notarized to be valid and recorded.
Getting in front of a notary can sometimes be challenging. Here are some options for having liens and waivers notarized remotely.
Can I File an Alabama Mechanics Lien on a Condominium Project?
In Alabama, you can file a lien against an individual condominium unit if you are an eligible party, but you cannot file a mechanics lien against the entire condominium property after the condominium declaration has been recorded.
However, if you perform work on the common elements with authorization from the condominium association, it is considered to have been done with the express consent of each benefitting owner. In this case, a lien can be filed against each unit.
Who Cancels an Alabama Mechanics Lien When I Get Paid?
Upon receiving a demand to release the lien claim after it has been satisfied or expired, a lien claimant must file a lien release within 30 days. Failure to comply can result in the claimant being liable for any actual damages incurred by the property owner, with a minimum penalty of $200.
Who Needs to Send an Alabama Preliminary Notice on Private Projects?
The only “traditional” preliminary notice that can impact a lien claimant’s rights in Alabama is the Notice to Owner. This optional, best-practice notice is recommended for any material supplier providing materials to someone other than the property owner. If this notice is sent, the claimant will be entitled to a full-price lien instead of an unpaid balance lien.
What Is the Deadline to Send an Alabama Preliminary Notice?
The Notice to Owner must be sent to the property owner before furnishing materials to the project. This notice secures a supplier’s full-price lien protection unless the owner objects to the listed materials in writing.
Alabama law does not specify how far in advance the Notice to Owner must be sent, but it should allow enough time for the owner to respond before the materials are used in the project. This timing was discussed in the Alabama Appeals Court case, Gunther v. Carpet Systems of Huntsville, Inc. (October 2013). There is some ambiguity regarding whether the notice must be delivered before every material delivery, just the first one, or any delivery for which protection is desired.
What Happens If I Send an Alabama Preliminary Notice Late?
Failure to send a Notice to the Owner before furnishing any materials does not completely invalidate a claimant’s rights. However, their lien protection will be limited to the unpaid balance at the time the Notice of Unpaid Balance (NOI) is served on the owner.
5 Essential Things to Know About Alabama Mechanics Liens
Alabama law does not require an “original contractor” to send a preliminary notice. An original contractor is the party who has contracted directly with the property owner.
For everyone else, there are a few key points to know about notices:
- Anyone who did not contract with the owner must deliver a Notice of Unpaid Lien to the property owner. While Alabama law does not specify a precise deadline for this notice, it must be delivered before filing the lien.
- Material suppliers have an optional rule allowing them to file a Notice to Owner Prior to Performance (also known as “Notice to Owner Before Work”) to obtain the same lien rights as an “original contractor.” To benefit from this notice, the material supplier must file it before furnishing any materials.
- Property owners have several legal defenses available against a mechanics lien. These defenses can include proving that the lien was not filed within the required time frame or that the work was not completed satisfactorily. Additionally, procedural requirements for asserting a mechanic’s lien must be strictly followed, such as providing proper notice and filing within the statutory period.
If there is no direct contract with the owner, a Notice of Unpaid Lien must be provided to the owner before filing a lien. Although not mandatory, sending a Notice to the Owner can offer greater protection. While Alabama law does not specify how long before performance a Notice to Owner must be sent, material suppliers can secure similar lien rights to those of a general contractor by providing this notice before supplying any materials.
How to File a Mechanics Lien in Alabama?
Mechanics liens are a powerful tool for ensuring fair payment in construction projects. They provide a legal mechanism incentivizing property owners and others in the contracting chain to settle debts by granting the lien claimant a stake in the improved property. This statutory protection allows construction professionals to undertake projects with the confidence that they will receive the compensation they have earned.
If you’re considering filing an Alabama mechanics lien, this guide will walk you through the process. However, it’s crucial to be aware of the preliminary notice and timing requirements that must be met before filing a valid lien in Alabama. The process can be complex and time-consuming, so careful attention to detail is necessary. Once you’re ready, follow the steps outlined below to initiate the lien process.
Special Note – Two Different Types of Mechanics Lien in Alabama
Alabama’s rich history in the iron and steel industry is symbolized by the Vulcan statue in Birmingham, the largest iron ore statue in the world. There are two types of mechanics liens in Alabama: Full Price and Unpaid Balance. The type of lien you can file depends on your role in the construction project and the timing of your notices.
- Full-price liens are available to prime contractors, those directly contracting with the property owner, or material providers who have given prior notice to the owner before delivering materials.
- Unpaid Balance liens are available to other parties once a notice of unpaid lien has been delivered to the property owner. This notice requires the owner to withhold sufficient funds to satisfy your claim, but if the owner has already paid the general contractor, your claim may be limited to the remaining balance owed.
For subcontractors, it’s vital to send notices early to ensure they reach the property owner before disbursements are made to the prime contractor.
Ensure Your Alabama Mechanics Lien Includes the Required Information
To protect your lien rights, your Alabama mechanics lien must include all statutorily required information. Missing or incorrect information can invalidate your claim. The oath of the claimant or someone knowledgeable of the facts must verify the lien.
Your lien should include:
- The amount owed, after all credits.
- The claimant’s name and address.
- The property owner’s name and address.
- A description of the property being lined.
- Details of the work, materials, or services provided.
While Alabama law is somewhat lenient regarding errors in the lien document, it’s always best to ensure accuracy.
Steps to File an Alabama Mechanics Lien
When filing a mechanics lien in Alabama, it must be recorded with the office of the probate judge in the county where the property is located.
Follow these steps:
- Prepare your lien form with the required information.
- Send the form to the appropriate probate office, including any required margins, fees, and additional copies.
- If filing in person or by mail, ensure that the correct recording fees are included to avoid rejection.
Once recorded, you may obtain a stamped copy of the lien for your records. If mailed, include a self-addressed stamped envelope for the return of your copy.
Although Alabama law does not require a mechanics lien to be served on the property owner, doing so can expedite payment. Promptly notifying the owner about the lien can lead to quicker resolution and may avoid the need for lien enforcement.
Depending on your preference, you can serve the lien notice by regular mail or certified mail.
Filing a mechanics lien in Alabama is a strong step toward securing the payment you’ve earned. However, remember that filing a lien doesn’t guarantee its validity—it can still be challenged. The lien remains effective for six months from the recording date, so be mindful of this expiration. This guide empowers you to navigate the mechanics lien process in Alabama and protect your right to fair compensation.
Get in Touch
Navigating the mechanics lien process in Alabama is crucial for contractors and suppliers to ensure they receive payment for their work. By understanding the specific rules, requirements, and deadlines outlined in this guide, you can effectively protect your lien rights and secure your financial interests.
At CRM Lien Services, we have been serving customers nationwide with required reference documentation for lien claims since 1986. We assist property owners in navigating the mechanics lien process, informing them about their rights and responsibilities, including providing notices, securing payment, and releasing mechanic’s liens.
We have a wealth of expertise, are licensed and insured, and have a team of highly knowledgeable document processors. If you’re looking for a straightforward process for filing a mechanics lien, give us a call or shoot us an email.
We would love to work with you and help you lower your risk and get paid fast!
