Photo by Saad Salim on Unsplash

Mechanics Lien Overview

The Lien is a document, which may be attached to the Title of a Real Property.
IE: REAL PROPERTY= House, Building, Parcel of Land.  (not PERSONAL PROPERTY  Car, Truck or TV) The lien encumbers the Real Property to which it is attached. By doing so, your unpaid invoices are SECURED by the value of the Real Property.     Example: if you owe taxes to the Government. The Government may place a TAX Lien on your Real Property and force you to sell the Real Property so the Government may collect the taxes due to them, which have been stated in the TAX Lien. A Mechanics Lien or Construction Lien, as it is sometimes called, works the same way. The difference being that this lien may be placed upon your property by anyone having a valid RIGHT TO LIEN your real property, in order to protect any money due to them for having participated in the improvement of your Real Property.     One thing to keep in mind: If someone elects to place a lien against your property, they must have the RIGHT TO LIEN. This RIGHT TO LIEN is awarded to those who comply with the requirements of the lien laws of the state where the Real Property is located. Should someone file a lien against your Real Property without complying with the State Lien Laws, they could be held liable for any damages the lien may cause.    So it is important to understand the scope of the Lien Laws for the State before having a lien filed. Another thing to keep in mind is that the lien is not an end of the process of someone using the lien laws to collect their unpaid invoices. Once a VALID Lien is filed, and those required to be notified of the lien have in fact been notified. The Lien must be acted upon to further it’s intended purpose. The person/company who is claiming a lien must usually do one of the following within a limited number of days after the lien has been filed:

  1. Bring the recorded lien to a licensed attorney and start a Foreclosure Lawsuit using the lien as the basis (or authorization) for the lawsuit.
  2. Prepare and deliver a “Release of Lien” to the Owner of the Real Property in exchange for payment of the amount claimed in the lien.
  3. In some states it is possible to have the recorded lien EXTENDED beyond the scheduled expiration of the originally recorded lien. This may happen when the Claimant and the Owner of the Real Property named in the lien have agreed to terms to resolve the amount claimed in the lien. It will require that a new lien be created and both parties must endorse the new lien. The new lien will be recorded in place of the original lien. This must happen prior to the expiration of the original lien.

If none of these actions are executed and the originally recorded lien expires, the lien will become invalid and must be removed from the title of the Real Property. This can happen in one of two ways:

  1. The person/company who filed the original lien must have a “Release of Lien” prepared and recorded in the same office where the original lien was filed.
  2. The Owner of the Real Property may have a licensed attorney prepare documentation to have the original lien EXPUNGED. This is a detailed process and costly for the Owner. Recovery of this expense plus damages may be awarded through the courts, which will allow the Owner to recover this cost from the person/company who placed the original lien.

The CAUTION is that those who have the right to claim a lien and proceed with the actual filing of a lien must remain aware that follow up action is needed after the lien is recorded and served. In the event that a lien is allowed to expire and remain recorded against the title of the real property it is considered to be a “Cloud against the title” and should be removed immediately upon receipt of a formal request from the Owner of the Real Property. Failure to remove the lien may result in the costs associated in the process of the Owner having the lien expunged.

Can someone else remove my Lien?

To have your lien, release of lien, or documents required to secure your rights to lien, contact CRM Lien Services, Inc. – You don’t have to take chances with this process and you don’t have to use an attorney until the lien reaches a point where it must be included as part of a lawsuit. CRM has been serving customer across the country with all of the reference documents since 1986. We are licensed and Insured and employ many knowledgeable document processers who may professionally address any of your concerns about these documents. Call CRM today at 1-800-PRELIMS (773-5467).

You Might Also Like...

Notice to Owner: FAQ

#1 WHAT IS A NOTICE TO OWNER (NTO)? A Notice to Owner (often referred to as a Preliminary Notice or Prelim) is a document which

Read More »