When contractors or suppliers in Delaware are not paid for their work on a construction project, they can file a mechanics lien to ensure they receive the compensation owed. A mechanics lien acts as a legal claim, giving the unpaid party a security interest in the property involved.

It is crucial to correctly fill out the Mechanics lien Delaware form, including essential information such as the lien claimant’s name, property owner details, and project timeline.

At CRM Lien Services, we specialize in ensuring that you get paid quickly and reliably. We can prepare and file mechanics liens for you in accordance with Delaware law, taking into account Delaware construction lien law and state-specific rules and regulations, including the need for an adequate and ascertainable description of the real estate.

This page details the essential regulations, criteria, and deadlines you must meet to successfully file a mechanics lien in Delaware.

Key Takeaways

• Wide Eligibility with Specific Exclusions: In Delaware, contractors, subcontractors, suppliers, and licensed professionals providing labor or materials over $25 for construction projects can file a mechanics lien. However, rental equipment providers and suppliers to other suppliers are not eligible for lien rights.
• Strict Filing Deadlines and Requirements: Direct contractors must file a Statement of Claim within 180 days after project completion, while other claimants have 120 days from the last supply of materials or labor. All lien documents must be sworn under oath, properly notarized, and submitted to the appropriate county’s Prothonotary office.
• Priority and Enforcement Procedures: Delaware mechanics lien do not override existing mortgages or pre-existing liens unless specific conditions are met, such as the use of at least 50% of mortgage funds for construction. This includes cases where the mortgage is considered existing indebtedness, providing security for a loan secured by existing debts on the property. Proper service of notices to lien holders and timely enforcement actions within one year are crucial to maintaining lien validity.

Understanding Delaware Mechanics Lien Law

What is a Mechanics Lien in Delaware?

A mechanics lien in Delaware is a legal claim filed by a contractor, subcontractor, or material supplier against a property owner’s real estate to secure payment for labor, materials, or construction management services provided for a construction project. This lien acts as a powerful tool, enabling claimants to recover unpaid debts by placing a cloud on the property’s title. Consequently, the property owner may find it challenging to sell or refinance the property until the lien is resolved. By leveraging a mechanics lien, those who have contributed to the construction project can ensure they receive the compensation they are rightfully owed.

Importance of Delaware Mechanics Lien Law

The Delaware Mechanics Lien Law plays a crucial role in safeguarding the rights of contractors, subcontractors, and material suppliers who provide labor, materials, or construction management services for construction projects within the state. This law offers a structured mechanism for claimants to secure payment for their contributions, ensuring they are not left uncompensated for their efforts.

By mandating that property owners prioritize payments to those who have provided essential services and materials, the law promotes fairness and transparency within the construction industry. This legal framework not only protects the financial interests of claimants but also fosters a more equitable environment for all parties involved in construction projects.

Who Is Authorized to File a Mechanics Lien in Delaware?

Delaware statutes grant mechanics lien rights to any party that provides:

“labor or materials, or a combination of both, exceeding $25 for the erection, alteration or repair of any structure.” Additionally, liens can be filed for work or supplies related to “plumbing, gas installations, wallpapering, paving, installing ironworks and machinery in mills and factories, bridge construction, building and filling wharves, piers, and docks, as well as land improvements through drainage, dredging, filling, irrigation, bank erection, and services provided by architects.”

However, rental equipment providers and those who supply materials to other suppliers are not eligible for mechanics lien rights in Delaware.

Moreover, if the mechanics lien pertains solely to land improvements without involving any structures, strict criteria must be met. To validate such a lien, there must be a written contract signed by the property owner that includes the names of all involved parties, a detailed metes and bounds description of the affected land, a general description of the work to be performed, the total payment amount, the amounts of any partial payments, and the deadlines for these payments.

Can Unlicensed Contractors Submit a Delaware Mechanics Lien?

Absolutely. In Delaware, there are no specific licensing prerequisites to submit a legitimate mechanics lien claim. However, it is always advisable to secure the appropriate licenses before engaging in any work that legally requires them.

What Are the Filing Deadlines for Delaware Mechanics Liens?

The timeframe for filing a Statement of Claim in Delaware varies based on whether the claimant has a direct contract with the property owner.

Direct Contractors:

• Filing Deadline: Must file within 180 days after the structure is completed.
• Additional Consideration: Delaware law specifies that a Statement of Claim is timely if filed within 180 days of any of the nine specific dates outlined in 25 Del. C. § 2711(a)(2). Some of these dates may occur well after the structure’s completion.

Other Claimants:

• Filing Deadline: Must file within 120 days from the last day materials were supplied or labor performed.
• Alternative Timelines: A Statement of Claim is also timely if filed within 120 days of the final payment being due to the claimant (including any retainage) or within 120 days after the final payment is made to the general contractor who has a direct contract with both the owner and the claimant.

Important Note:

• Tenant Contracts: If a lien claimant has a contract with a tenant instead of the property owner, the 120-day filing period applies.

Ensuring adherence to these deadlines is crucial for maintaining mechanics lien rights and securing the compensation owed.

Where Should I File and Record a Delaware Mechanics Lien?

Mechanics lien Delaware claims must be submitted to the prothonotary office of the Superior Court. To validate your lien, it is crucial to file it in the county where the construction work took place. Each Delaware county may have distinct rules and procedures that must be followed.

Does a Delaware Mechanics Lien Supersede Existing Mortgages or Construction Loans?

No. In Delaware, a mechanics lien becomes effective on the later of two dates: the start date of the labor or the date a primary mortgage is recorded on the property, provided that at least 50% of the loan proceeds were used to pay for labor or materials for the structure. Existing liens take precedence over mechanics liens, and any first mortgage that allocated 50% or more of its proceeds to construction costs, including future advances, is automatically classified as a pre-existing lien.

Who Removes the Delaware Mechanics Lien Once Payment Is Received?

Delaware law does not specify who is responsible for removing a mechanics lien once payment has been made. However, because enforcing a mechanics lien typically involves legal action, the court will dictate the steps to follow after the lien has been settled.

When Must a Preliminary Notice Be Sent in Delaware?

After submitting a Statement of Claim, you must dispatch a Notice to Lien Holders to all other lienholders of the property within a 10-day window. Typically, this notification accompanies the Statement of Claim.

How Should the Preliminary Notice Be Delivered in Delaware?

The Notice to Lien Holders must be mailed via certified mail and include a return receipt for confirmation.

How to File a Mechanics Lien in Delaware?

If you’re considering filing a mechanics lien in Delaware, this detailed guide will walk you through the process. Be aware that filing a mechanics lien in Delaware can be particularly intricate because enforcing the lien typically involves legal action. Additionally, corporations or LLCs may face restrictions when representing themselves. Once you’re prepared and eligible, follow the steps below to initiate the lien process effectively.

The Complexity of Construction Payments

Securing rightful payments in the construction industry can be challenging. Mechanics liens serve as a robust legal mechanism to help contractors and suppliers obtain the compensation they deserve. However, navigating the intricate legal and procedural requirements can be daunting. Once a mechanics lien is successfully filed, it can significantly enhance your ability to recover owed funds by establishing a claim on the improved property.

Steps to File a Delaware Mechanics Lien

1. Prepare the Lien Document

Ensure that your Delaware mechanics lien includes all necessary information as mandated by law. Additionally, prepare an affidavit affirming that the details within the claim or complaint are accurate and truthful. The claim must also include a statement confirming that neither this amount has been paid.

2. Sign and Notarize

Sign the lien document in the presence of a notary public, who must verify your signature and conduct the required oath ceremony. The lien must be signed “under oath” and properly notarized to be valid. After notarization, make a duplicate copy of the completed lien form for your records.

3. Submit to the Prothonotary

Deliver the original, notarized lien form to the Prothonotary (County Clerk) of the Superior Court in the county where the property is located. You can submit the lien in person, by mail, or through a courier service such as FedEx.

4. Serve the Property Owner

After recording the lien, obtain a certified copy to serve on the property owner. It’s advisable to keep an additional copy for your own records. If you mailed or couriered the lien to the county, include a self-addressed stamped envelope with instructions to receive copies of the recorded lien for both your records and to serve on the property owner.

Information Required on the Mechanics Lien Form

A valid Delaware mechanics lien must include the following information:

• Claimant’s Information: Full details of the party filing the lien, as required in plaintiff claims.
• Owner’s Information: Complete information of the property owner, referred to as such owner.
• Hiring Party’s Details: Information about the individual or entity that engaged the claimant, such as the contractor.
• Claim Amount and Contract: Total amount being claimed, along with a copy of the written contract if available.
• Specific Claims for Structures: Amount owed for each specific structure, if applicable, such structure.
• Dates of Service: The first and last dates when labor or materials were provided or such other act that determines the completion date.
• Property Description: A thorough description of the property subject to the lien.
• Credit Statement: A declaration that the labor and/or materials were provided on credit.
• Joint Claims: If filing a single claim for multiple structures, designate the amount due for each structure, such as a joint claim.

Recording the Lien

Once your lien form is complete, submit it to the Prothonotary of the Superior Court in the relevant county. Ensure you include the correct recording fees to prevent rejection of your lien due to improper payment. Recording fees can be verified by contacting the Prothonotary’s office, checking their website, or inquiring in person.

Delaware Superior Court Offices

Delaware has Superior Court offices in the following counties:

• New Castle County
• Kent County
• Sussex County

Understanding Filing Fees

When submitting your lien, include the appropriate recording fees. Incorrect fee amounts can lead to your lien being rejected, potentially causing you to miss critical deadlines. Verify the required fees by contacting the Prothonotary’s office directly.

Serving the Property Owner

After recording the lien, serve a true and attested copy to the property owner within 30 days. This can be done via certified mail return receipt requested. Retain an additional copy for your records to ensure compliance with Delaware law.

Issuing a Writ of Scire Facias

Delaware law mandates that all additional lien holders receive notice when a lien is filed. Additionally, you must provide a Writ of Scire Facias. If the lien is on an occupied residence, leave a copy of the writ with someone residing there. For unoccupied properties, the sheriff will attach a copy to the front of the structure.

Delivering the Delaware Mechanics Lien

Properly serving the lien and furnishing the writ is crucial to maintaining the validity of your lien claim. Failure to do so can result in the lien being invalidated. Ensure that all notices are sent promptly and in accordance with Delaware’s legal requirements.

How to Enforce a Lien

Foreclosure Process

If a property owner fails to settle a mechanics lien, the claimant has the right to initiate a foreclosure process to enforce the lien. This process begins with the claimant filing a complaint in the Superior Court of the county where the property is located. The complaint must name the property owner and any other parties with an interest in the property as defendants. It should also include a detailed statement of claim outlining the amount owed, the labor or materials provided, and the dates of commencement and completion of the work.

Once the complaint is filed, the claimant must serve it on the defendants, who then have 20 days to respond. If the defendants do not respond or fail to pay the amount owed, the claimant can seek a default judgment. This judgment allows the court to rule in favor of the claimant, enabling them to proceed with a foreclosure sale. The foreclosure sale involves selling the property to satisfy the lien, thereby recovering the unpaid amount.

It’s important to note that the foreclosure process can be complex and time-consuming. Claimants are advised to seek the guidance of an attorney experienced in Delaware mechanics lien law to ensure their rights are protected throughout the process. Additionally, strict compliance with all applicable laws and regulations, including the Delaware Mechanics Lien Law, is essential to maintain the validity and enforceability of the lien.

Filing a mechanics lien in Delaware can be a powerful method to secure the payments you are owed. By following this step-by-step guide and adhering to Delaware’s specific legal requirements, you can effectively protect your financial interests and ensure timely compensation for your labor and materials. If you need assistance, consider consulting with legal professionals who specialize in construction liens to navigate the complexities of the process successfully.

Get in Touch

Filing a mechanics lien in Delaware is a powerful strategy for contractors and suppliers to secure the payments they deserve. By following the guidelines and meeting all legal requirements outlined in this guide, you can effectively protect your financial interests.

At CRM Lien Services, we have been serving customers across the country 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.