Tips
Pay attention to possible "red flags" that indicate you may need to file a mechanic's lien. If a client is dodging or not responding to your efforts to contact him, this may be an indication of impending payment issues. If the customer strings you along in terms of making payment, make sure you are cognizant of the expiration date for serving and filing the lien.The laws for mechanic's liens differ, so evaluation the society statutes where you reside for relevant requirements.
Function
When a supplier or contractor lives up to his limitation of a legal Debt to ship materials to a capacity stop or perform occupation as agreed upon in a Business agreement, the owner of the Belongings is bound by that Business agreement to purchase the supplies or the labour according to the terms of the Treaty. Usually, the owner of the Belongings may not be a signatory on the Business agreement. Instead, she hires a prime or usual contractor, who signs an Treaty with suppliers and/or subcontractors. All the more whether the Belongings owner paid the prime contractor, who in turn did not earnings the subcontractor or supplier, the charter allows the parties to dwelling a mechanic's lien on the Belongings.
Considerations
In some states a mechanic's lien is automatically placed on a Belongings at the initiation of the elbow grease that is to be performed. Other states want a contractor or supplier to serve and record a mechanic's lien within a specific period. Some states also require a specific dollar amount for the work performed or the material supplied before a claim is placed on a property.
Effects
If a mechanic lien is filed against your property, the encumbrance can lead to a wide variety of problems. One issue is that the property owner can end of paying twice for the same job. Also, a "cloud" on the title to a house, building or land affects the capacity to receive a loan, refinance or even sell the property. If the owner is unable to pay off the lien, it could lead to foreclosure proceedings to pay the obligation.
Time Frame
The time frame for serving and recording a lien depends on the state in which the lien is filed and the party who is placing the encumbrance on the property. For instance, in Illinois subcontractors and suppliers must serve the lien within Ninety days from the last date of delivering materials or supplying labor. They must file the mechanic's lien in the county recorder's office materials or labor within One hundred twenty days. Prime contractors do not have to meet the requirements for the 90-day notice, but are subjected to the 120-day requirement for recording the lien with the county recorder.
The laws for mechanic's liens vary from authority to society.A mechanic's lien is a "ownership," or a legal enthusiasm a man places against a Belongings until the owner of the Belongings meets a legal Debt to invest in elbow grease that was performed on the Belongings by the man placing the lien. Normally the divulge is placed on the Belongings by a prime contractor or subcontractor. In many cases, free of charge suppliers very compass liens against Belongings.
