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Mechanic's Lien 101: What You Need to Know to Get Paid
Mechanic liens are a powerful tool in the construction industry. They exist to make sure
construction project participants get paid for the work done. If you're involved in the
construction industry, it's essential to know how these liens work and what steps must
be taken to ensure you get paid when you're supposed to.
What Is a Mechanic's Lien?
First, you need to understand what a mechanic's lien is. A mechanic's lien happens in
the construction industry when a contractor performs work to improve a property but
doesn't receive payment for the completed work. The unpaid contractor can place a lien
on the improved property, acting as collateral on the property until they receive their
payment.
A lien guarantees an obligation. This means the property owner can no longer ignore
the fact they haven't paid their contractor. A mechanic's lien makes it almost impossible
for the property owner to sell or transfer ownership of the property until the payment has
been made and the lien is lifted.
Why Should You File a Mechanic's Lien
Did you know that only about half of all contractors get paid in full on their projects? This
makes it hard for contractors to pay their bills on time because they aren't receiving their
expected income. These numbers are why mechanic's liens are so crucial in the
construction industry.
You can file a lien even when you don't plan to follow through. Contrary to common
belief, filing a lien doesn't always mean there's an issue. A lien simply makes it much
more likely to receive your owed payments, even if the property owner declares
bankruptcy
Steps to Follow to File a Lien
If you've decided it's time to file a lien to ensure you get paid on a project, you must
follow the proper steps to ensure you're doing everything legally. Here is a rundown of
what the basic process looks like when filing:
* Notice of Intent: A notice is filed and sent to the owner, specifying the amount
they owe you. This is considered a warning, with the hope that a payment will
come through before the lien is filed.
* Prepare the Lien: This step includes collecting proper paperwork, such as a
notarized statement, a breakdown of the unpaid bill, and any interest or fees
included. Double-check the lien for accuracy before filing to avoid legal
repercussions, including fees for intentional dishonesty.
* File and Serve: Now it's time to file the lien. This step is done through the proper
county clerk's office within the allotted time. From there, the county clerk will
ensure the lien is served to the appropriate people.
* Post-Filing: After the lien is filed, the property owner is given a period to pay
their debt before the state takes further action.
Final Thoughts
Filing a mechanic's lien is a serious action that takes a lot of preparation. If you want to
make sure you get paid for your unpaid projects, contact Nationwide Notice. Our team
will walk you through preparing and filing your lien, ensuring you're paid the money you
deserve.