In Minnesota, if contractors or suppliers remain unpaid on a construction project, they have the option of filing a mechanic’s lien to ensure payment. A mechanics lien grants the unpaid party a legal claim against 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 Minnesota construction lien law and state-specific rules and regulations, including the need for an adequate and ascertainable description of the real estate.
To successfully file a mechanics lien Minnesota, it’s essential to understand the necessary rules, guidelines, and deadlines that must be followed.
Key Takeaways
- Strict Deadlines: In Minnesota, a mechanics lien must be filed within 120 days of the last provision of labor or materials. Missing this deadline can invalidate your claim.
- Essential Information: A valid mechanics lien requires detailed information, including claimant and property owner details, a description of labor/materials provided, and proper documentation of the lien amount.
- Serve Notice: After filing your lien, you must serve a written notice to the property owner or contractor within the same 120-day timeframe to ensure your lien remains enforceable. This written notice can be delivered personally or via certified mail and outlines the rights of the involved parties.
What is a Mechanics Lien?
A mechanic’s lien is a powerful legal tool that contractors, subcontractors, and suppliers can use to secure payment for their work on a property. Governed by Minnesota Statutes § 514.01 et seq., a mechanics lien provides a security interest in the property itself, ensuring that those who contribute labor, materials, or services to a construction project are compensated.
Essentially, if you’re not paid for your work, a mechanics lien allows you to make a legal claim against the property, which can ultimately lead to foreclosure if the debt remains unpaid. This mechanism is designed to protect the financial interests of construction professionals and suppliers, making it a crucial aspect of Minnesota law.
Who Is Eligible to File a Minnesota Mechanics Lien?
In Minnesota, individuals or entities that provide labor, materials, or services to a property owner, their agent, a contractor, or a subcontractor on a construction project are entitled to file a mechanics lien. This also includes professionals like engineers, surveyors, and architects. However, lien rights are generally restricted to second-tier subcontractors and suppliers. Individuals or entities with a legal or equitable interest in the property can also file a mechanics lien.
Suppliers can claim mechanics lien rights even if the materials they provided weren’t used in the construction, as long as they were supplied in good faith. That said, suppliers to other suppliers do not qualify for mechanic’s lien protection in Minnesota.
Regarding what qualifies as “lienable work,” Minnesota courts have been somewhat inconsistent. First, there’s a debate over whether “site work” qualifies as lienable. Second, the distinction between lienable “fixtures” and non-lienable “trade fixtures” has not been clearly defined. For instance, the court recently ruled that a movie screen installed in a theater is not considered a “fixture” and, therefore, not lienable.
What Is the Deadline for Filing a Minnesota Mechanics Lien?
In Minnesota, a mechanics lien statement must be filed and delivered to the property owner within 120 days from the date the lien claimant last provided labor or materials for the project. The district court establishing the deadline is crucial for the enforcement of the lien.
When determining the deadline, Minnesota courts typically disregard “nominal or insignificant” labor or materials that were supplied solely to prolong the filing deadline. This principle was affirmed in a recent Minnesota Court of Appeals ruling, which also clarified that small repair work may still count when calculating the final date.
What Details Must Be Included in a Minnesota Mechanics Lien?
Minnesota mechanics lien statements are regulated by Minn. Stat. §514.08 and must contain the following details:
- A declaration that the claimant intends to claim and enforce a lien;
- The total lien amount;
- A statement indicating the amount is due and unpaid;
- A description of the labor and/or materials provided;
- Information about the claimant;
- Details about the party who hired the claimant;
- Dates when labor or materials were first and last supplied;
- A description of the property;
- Owner’s information;
- Acknowledgment that a copy of the lien will be served on the owner, their agent, or the hiring party;
- A statement confirming that the preliminary notice was provided, if applicable;
- A written contract must include specific notices regarding lien rights.
Lien Statement and Claim Amounts
A lien statement is a critical document that must be filed with the county recorder’s office to perfect a mechanics lien. This statement serves as the official record of your claim and must include specific details to be valid. Key information required in the lien statement includes the name and address of the lien claimant, the name and address of the property owner, a clear description of the property, and the total amount of the lien claim.
While the claim amount can include interest, it’s important to note that it cannot cover attorney’s fees, surety bond premiums, “soft costs,” or costs for extra materials that the property owner did not authorize. Ensuring that your lien statement is accurate and complete protects your right to payment under Minnesota law.
Is a Legal Property Description Required in a Minnesota Mechanics Lien?
No, although a legal property description is the most precise way to identify the property for a lien, Minnesota law only mandates a “description of the premises to be charged that identifies it with reasonable certainty.
Where Should I File and Record a Minnesota Mechanics Lien?
In Minnesota, mechanics lien claims are typically filed with the county recorder’s office. To ensure your lien is valid, it must be recorded in the county where the work took place.
Since Minnesota has many counties, each with its own specific rules and guidelines, we’ve compiled a list of offices that handle mechanics lien claims for your convenience.
Note: If the lien is against registered land, it must be filed with the Registrar or Examiner of Titles. The lien must be filed with the Minnesota Secretary of State for projects like railroads or telegraph lines.
Does a Minnesota Mechanics Lien Take Precedence Over Existing Mortgages or Construction Loans?
In Minnesota, the priority of mechanics liens in relation to a construction lender’s mortgage is based on the date of the first visible physical improvement to the property. Any mortgage, lien, or encumbrance recorded after the initial labor or materials are supplied to begin the project does not take precedence over a mechanics lien. The work or materials must be “actual and visible.”
Competing MN mechanics liens are considered to have equal priority regardless of the filing date and share recovery proportionally in a foreclosure proceeding. In cases where there are competing liens, the district court may need to determine adverse claims to resolve the competing claims against the property.
Who Is Responsible for Canceling a Minnesota Mechanics Lien Once the Lien Claimant Receives Payment?
A Minnesota MN mechanics lien must be released within 10 days after the claim has been settled, or a release is requested if the lien has been satisfied or has expired. If the lien is not released within this timeframe, the party responsible may face a civil action and be liable for a minimum of $25 in liquidated damages, as well as any actual damages incurred.
Written Notice Requirements for Contractors in Minnesota
When prime contractors are required to give notice, it serves as an alert to the property owner, informing them that if any party goes unpaid, a mechanics lien may be filed. In this case, referring to it as a “Minnesota pre-lien notice” could be fitting for contractors.
In Minnesota, contractors who have direct contracts with property owners are obligated to include a specific notice within the contract using a required statement.
If printed, the statement must be in at least 10-point bold type or in capital letters if typewritten, and it read:
“(a) Any person or company supplying labor or materials for this improvement to your property may file a lien against your property if that person or company is not paid for the contributions.
(b) Under Minnesota law, you have the right to pay persons who supplied labor or materials for this improvement directly and deduct this amount from our contract price or withhold the amounts due them from us until 120 days after completion of the improvement unless we give you a lien waiver signed by persons who supplied any labor or material for the improvement and who gave you timely notice.”
But don’t panic if this isn’t included in your contract! Contractors can still provide this notice separately within 10 days of the contract agreement.
Preliminary Notice Requirements for Subcontractors in Minnesota
Preliminary notice for subcontractors, suppliers, and other lower-tier parties follows a more standard process. The notice must be delivered, either in person or via certified mail, within 45 days of the initial provision of labor or materials. Since this notice is more detailed, I won’t include the full text here.
Lien Claimant Rights and Responsibilities
As a lien claimant, you have the right to file a mechanic’s lien to secure payment for your contributions to a property improvement project. However, with these rights come specific responsibilities. First, you must provide a pre-lien notice to the property owner, alerting them to your potential claim. Next, you need to file the lien statement within 120 days after the last date of work or delivery of materials.
Additionally, you must serve the lien statement on the property owner, their authorized agent, or the contracting party within the same timeframe. To enforce the lien, you must bring a civil lawsuit against the property owner within one year of filing the lien statement.
Failure to meet these requirements can render your lien invalid or unenforceable, so it’s crucial to adhere to all procedural steps meticulously. By understanding and fulfilling these responsibilities, you can effectively protect your right to payment under Minnesota law.
How to File a Mechanics Lien in Minnesota?
If you’re aiming to secure payment on your Minnesota construction project by filing a mechanics lien, this detailed guide will walk you through the entire process step by step.
Before proceeding, remember that there may be preliminary notice requirements in Minnesota, and you must adhere to specific deadlines for your lien to be valid. Filing a mechanics lien on your own can be complex and time-consuming, but if you’re ready to move forward, follow these instructions to navigate the process successfully. Consulting a lien claimant’s attorney can help navigate the complex filing process.
Step 1: Complete the Mechanics Lien Form
To start, ensure you have an accurate mechanics lien form that meets Minnesota’s legal requirements. Although mechanics lien forms are widely available, it’s crucial to use one that complies with state regulations.
Key Information to Include:
- Claimant Information: Fill out your full name and address. If filing for a company, include the full legal business name and designation (e.g., LLC, Inc.).
- Property Owner: Accurately list the property owner’s name(s). List all relevant parties if there are multiple owners or a tenant commissioned the work.
- Hiring Party: Include the contact information for the party that hired you, typically found in your contract documents.
- Property Description: Provide a clear description of the property being charged. While a full legal description isn’t mandatory, more detail than a simple street address is needed.
- Labor & Materials Description: Summarize the labor or materials provided to the project without needing to itemize every detail.
- Lien Amount: Minnesota law limits your claim to the contract price or the reasonable value of the labor or materials provided. Interest can be added, but other costs, such as legal fees, should be excluded.
- First & Last Dates of Furnishing: Record the first and last days your company provided work or materials on the project.
- Signature & Notarization: Sign the form under oath and have it notarized. Any lien claim that isn’t notarized will be rejected.
Step 2: Submit Your Mechanics Lien
Once your form is filled out correctly, it’s time to file the lien claim. This step can be straightforward, but errors like incorrect fees or filing in the wrong location can delay or invalidate your claim.
Filing Deadlines:
The deadline to file a mechanics lien Minnesota is 120 days from the last date of furnishing labor or materials. Missing this deadline will void your claim.
Where to File:
Mechanics liens are typically filed with the county recorder’s office in the county where the work was performed. If the lien is for registered land, it must be filed with the Registrar of Titles. For specialized projects like railroads or telegraph lines, the lien must be filed with the Minnesota Secretary of State.
Filing Methods:
You can file your lien in person, by mail, via e-recording (if available), or through Levelset, an online service that helps with lien filing.
Step 3: Serve Notice of Your Lien via Certified Mail
After filing your lien, you must also serve a copy to the owner, their agent, or the contracting party. This must be done within the same 120-day window as filing the lien. You can serve the notice either in person or by certified mail.
What Happens Next?
Your mechanics lien is valid for one year from the date of your last furnishing. If payment isn’t received, further steps may be necessary. If the claimant obtains the judgment, they can recover specified amounts from a cash deposit or bond associated with the lien.
Foreclosure:
If payment still hasn’t been made as the one-year deadline approaches, you may need to initiate foreclosure proceedings. A mechanics lien guarantees payment, but foreclosure can be a lengthy process, so it’s essential to weigh your options.
Notice of Intent to Foreclose:
Before moving to foreclosure, you can issue a Notice of Intent to Foreclose. This warning typically pushes parties to settle the debt to avoid legal action.
Lien Release: Lien Waiver Signed
Once you’ve been paid, you’ll need to remove the lien from county records by filing a lien release.
Following these steps will help ensure your Minnesota mechanics lien is properly filed and enforced to secure the payment you deserve.
Get in Touch
Filing a mechanics lien in Minnesota is vital for contractors, suppliers, and other construction professionals to secure payment. By understanding Minnesota lien laws, including eligibility, filing deadlines, required information, and serving notice, you can ensure your lien is properly filed and enforceable. While the process may seem complex, following each step carefully will help protect your rights and increase your chances of being paid for your work. Additionally, reasonable attorney fees may be incurred while enforcing a lien.
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.
