The name of a Mechanic’s Lien is a bit deceptive as this legal remedy is not limited to mechanics. In fact, it is most commonly used by subcontractors and suppliers involved in construction work.
How Does a Mechanic’s Lien Work?
A Mechanic’s Lien is an additional remedy available to subcontractors and suppliers who are not paid for their work. Imagine that you are having your kitchen remodeled, including installation of new appliances. If you failed to pay for the appliances and failed to pay for installation, both the supplier of the appliances and the subcontractor performing installation would have the right to place a Mechanic’s Lien on your property.
The lien creates a cloud on your property title, meaning that public property records will show that the property is encumbered by a lien. This makes it highly unlikely that you will be able to sell your property.
To secure a Mechanic’s Lien, a subcontractor or supplier will need to:
- File a claim of Mechanic’s Lien in the county where the property is located; and
- Work with the homeowner for resolution over a set period of time before filing a lawsuit
Work With Someone You Trust
If you are working with a general contractor who you are entrusting to provide payment to subcontractors and suppliers, be sure you select a general contractor that you trust. If you pay the general contractor and they fail to pay any subcontractors or suppliers, the unpaid individuals can still place a lien against your property until they receive payment.
How to Avoid a Mechanic’s Lien
According to the Contractors State License Board, there are several strategies you can employ to ensure you avoid a Mechanic’s Lien when working with a general contractor, including:
- Joint Checks. Make out checks jointly to the general contractor and appropriate subcontractor or supplier.
- Lien Waiver. Require the general contractor to get lien waivers from any subcontractor or supplier the contractor is responsible for paying. Confirm such waivers are valid in your state.
- Control Payment. Take on the responsibility of paying subcontractors and suppliers yourself.
Whether you are kicking off a project and hoping to avoid a Mechanic’s Lien, are a subcontractor or supplier needing to file a Mechanic’s Lien, or own property encumbered by a lien, contact our team in Florida or California today for assistance.