Mechanics Liens Facts

Mechanics Lien Overview and Trends

  • Mechanics or construction notice liens are vital for contractors, subcontractors, and suppliers to address payment disputes​​.
  • Filing a mechanics lien can be complex due to variations in state and county laws​​.
  • Mechanics liens include expenses like towing, storage fees, and filing costs​​.
  • Mechanics liens secure payment for services, labor, and materials on personal and real property​​.
  • Mechanics liens are not allowed by government contractors or any federal government agency​​.

Mechanics Lien Filing Process and Data

  • A mechanics lien allows a contractor to pursue legal judgment, potentially leading to property sale and payment from the sale proceeds​​.
  • Filing mistakes in a mechanics lien can lead to claim invalidation​​.
  • Preliminary notice to the property owner is the first step in filing a mechanics lien​​.
  • This notice must include specific information about the company and contract​​.
  • A mechanics lien has to be filed within 90 days of sending the preliminary notice​​.
  • Mechanics liens hold collateral on unpaid work done to improve a home, house or property​​.
  • The lien must include information about the company and contract​​.

Mechanics Lien Statistics and Impact

  • CNS has recorded over 90,000 liens in the last 12 months​​.
  • CNS processed prelims for construction projects valued at over $22.7 billion​​.
  • CNS works with more than 20,000 contractors and material suppliers​​.
  • Mechanics liens vary depending on work type and location​​.
  • The time limit to file a claim on residential property is generally one year from work completion​​.
  • Commercial project claims have a two-year deadline​​.
  • The maximum claim amount per creditor is $50,000 per year​​.

Payment and Litigation Facts

  • Mechanics liens can be withheld by the owner until legal proceedings conclude​​.
  • Consider the feasibility of action against nonpayment of invoices​​.
  • Litigation readiness is important when filing a mechanics lien​​.
  • Filing a mechanics lien may involve legal costs​​.

Invoicing and Payment Strategies

  • Accurate and timely invoicing is essential for quick payment​​.
  • Invoice immediately upon completion to expedite payment​​.
  • Mechanics liens give contractors a way to get paid quicker​​.

Enforcement and Legal Considerations

  • If a vehicle is towed, the lien arises at the time of towing and may lead to a lien sale​​.
  • The lien sale process requires vehicle possession and may need State DMV authorization​​.
  • Different states have varying rules for creating and enforcing mechanics liens​​.
  • Due to sovereign immunity, the government’s Real property is usually not subject to mechanics liens​​.

State-Specific Mechanics Lien Laws

  • In the U.S., 34 states have statutes for mechanics liens on personal property​​.
  • Many states distinguish between types of real property for filing mechanics liens​​.
  • In New Jersey, strict regulations exist for placing a mechanics lien on residential property​​.
  • Some states, like Maryland, require court applications to file mechanics liens​​.

Prioritization and Perfecting Mechanics Liens

  • To have an enforceable lien, it usually must be “perfected” by complying with statutory requirements​​.
  • These requirements often include filing various notices within specific time limits​​.
  • Mechanics liens are given priority over most other real property security interests​​.
  • Special provisions in some states determine the priority between a mechanic’s lien and construction financing liens​​.

Additional Strategies for Timely Payment

  • Submitting accurate invoices on time is crucial for swift payment​​.
  • Invoicing with every change order helps maintain a clear payment schedule​​.
  • Using invoicing software can facilitate faster and more hassle-free payments​​.

These lien facts provide a comprehensive overview of mechanics liens, including their purpose, filing process, legal considerations, and strategies for ensuring timely payment. For more detailed information on any specific aspect, refer to the sources provided or contact us today for lien filling services.




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