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Mechanics Lien vs. Notice of Intent to Lien: What's The Difference?

In the construction industry, there are various rules and regulations put in place to protect the rights of contractors, subcontractors, and suppliers. Notices of intent to lien and mechanics liens are two essential legal elements you'll want to understand. You might also need the support of a notice/lien service company if faced with either situation.

Continue reading to learn the differences between a mechanics lien and a notice of intent to lien.

What Is a Mechanics Lien?

A mechanics lien is an effective legal means of obtaining payment for materials and labor used in the building or renovation of real estate. In the event of an underpayment for the labor or supplies provided during a project, suppliers, contractors, and subcontractors generally have the option to file a mechanics lien.

The following is a list of important features that a mechanics lien includes:

* A mechanics lien creates a security interest in the actual property, providing the claimant with a stake in the property while the outstanding payment is under resolution.
* The deadline for filing a mechanics lien is a set period that follows the completion of the job or the delivery of the materials. Each jurisdiction has a different deadline.
* The legal procedure for initiating a mechanics lien includes submitting a formal document detailing the work completed, the sum owed, and the property in question to the relevant government official.

What Is a Notice of Intent to Lien?

Before filing a mechanics lien, a notice of intent to lien acts as an early warning indicator. It is an official letter that a prospective lien claimant sends to the general contractor, property owner, or other pertinent parties associated with a building project.

Key characteristics of a notice of intent to lien are listed below:

Pre-Lien Notice: A notice of intent to lien is not a legal claim unto itself, in contrast to a mechanics lien. Rather, it is a pre-lien notice informing interested parties ahead of time that the claimant may file a mechanics lien.

Negotiation: Effective communication and negotiation are the main goals when delivering a notice of intent. The notice indicates that if payment difficulties are not swiftly handled, the claimant intends to pursue a mechanics lien.

Deadline Extension: In certain states, submitting a notice of intent to lien may allow parties more time to settle payment problems through the actual mechanics' lien filing deadline.

Legal Requirement: Before pursuing a mechanics lien, certain states or jurisdictions require issuing a notice of intent to lien. The inability to adhere to these criteria could mean the claimant can't uphold the lien.

Final Notes

Notices of intent to lien and mechanics liens are separate but equally important instruments for collecting money in the construction industry. By establishing a formal claim on the property, mechanics liens offer a way to enforce payment by selling the real estate. Meanwhile, notices of intent to lien serve as an early warning system and a vehicle for negotiations.

Understanding both and having the support of Nationwide Notice on your side, as an experienced lien service team, we can help you effectively navigate issues that may arise.

Contact Nationwide Notice today!