Mechanic’s Liens: Sometimes Litigation Is the Only Option

A mechanic’s lien is a legal claim that contractors, subcontractors, or suppliers can place on a property to ensure payment for work or materials provided. This type of lien is used in the construction industry and can be placed on both residential and commercial properties.

My companies will refuse to provide labor or materials without a mechanic’s liens to provide a safety net against non-payment. Of course, this means that mechanic’s liens are subject to a number of complicated laws. Naturally, whenever there are complicated laws, there are also complicated lawsuits.

Mechanic’s Liens Explained

The concept of this type of lien holding originated early in our nation’s history by Thomas Jefferson. Mechanic’s liens were crucial to the early development of this country.

Today, Texas and California both have complex requirements for mechanic’s liens that are much more involved than the early liens that helped expand the nation, but their concept and purpose remain:

• They are a legal claim against property.
• They are enforceable in court.
• Holders of mechanic’s liens can force foreclosure and liquidation of a property.

Mechanic’s liens make sure that project stakeholders are paid. Once property is liquidated, these liens are viewed as a higher priority than many other forms of debt. That means holders of these types of liens are among the first to be compensated after liquidation.

The rules of mechanic’s liens are subject to statutes that vary from state to state. If you intend to prepare a mechanic’s lien, it’s important that you talk to a lawyer. Mechanic’s liens should be carefully interpreted by an experienced attorney before anyone moves forward.

Disputes involving these liens are rarely simple. When things go wrong, mechanic’s lien disputes frequently go to court, requiring aggressive legal counsel.

Frequently Asked Questions About Mechanic’s Liens

Can I sell my house if there’s a mechanic’s lien against it?

Mechanic’s liens show up on a title search of a property and this can complicate the sale of your home. Any potential buyer will know that there is a lien against the property. Their attorney will inform them that if the lien isn’t resolved before the sale, it becomes their problem. Many would-be buyers are not interested in that type of hassle.

Can a company take my house over an outstanding mechanic’s lien?

The holder of this type of lien still must pursue due process. They can’t just repossess your home the way a machinery lien holder can repossess a vehicle. Still, through proper court procedures, the mechanic’s lien could result in the court forcing your home into foreclosure so that it can be liquidated to pay off the lien.

Are there limits on mechanic’s liens?

Yes! To be able to place a lien on a property for work completed, the contractor, subcontractor, supplier or other interested party must follow strict deadlines and file their paperwork properly.

It’d be unfortunate for the lienholder to lose in court over a technicality that an attorney could have prevented. It’d be even more unfortunate to lose a court battle against someone that owed you money simply because you didn’t choose an attorney with powerful litigation skills and knowledge of the complexities of mechanic’s liens.

Can a property owner avoid mechanic’s liens?

The simplest way a property owner can avoid a mechanic’s lien is to pay their contractors on time. Still, sometimes there are billing and payment errors, so property owners should always make sure to have records of every payment that they make.

Other issues can arise when a property owner pays, but the general contractor fails to pay their subcontractors. One way to avoid this could be to write out checks to the general contractor and each individual subcontractor jointly through a series of checks. This is one way to make sure that the subcontractors and other parties get paid.

In some places, a property owner might be able to negotiate with a contractor to have a lien waiver put into place on the construction contract. This would essentially be a situation where the contractor, subcontractors and other interested parties would waive their right to place a lien on unpaid work. In Texas, for example, lien waivers are unenforceable unless certain conditions are met, so unpaid parties shouldn’t just assume there’s no way to recover costs simply because a lien waiver exists.

Can a subcontractor file a mechanic’s lien?

Yes. Mechanic’s liens are frequently used by subcontractors and even suppliers if they were not paid for improvements they made to a property. This means that a property owner could face a mechanic’s lien even if they weren’t the one behind on a payment!

This is starting to sound unfair. Why are mechanic’s liens allowed to be this complicated?

While the complexities of mechanic’s liens may result in a property owner having to pay for the same work twice, the property owner can sue the general contractor. The law is presuming this fact and protecting people who have invested labor and supplies into a project. Unfortunately, in reality, without an aggressive litigating attorney, a property owner may end up getting the short end of the stick in court. In contract and construction law cases, justice isn’t always served without an experienced litigation attorney by your side.

How do I enforce a mechanic’s lien?

If you need to enforce a mechanic’s lien, you should find an attorney who will fight for you. The process of lien enforcement is complex, and failure to fulfill even the finest point may result in losing your investment all together. While it’s not fair, it’s exactly why the team at LloydWinter, P.C. is so determined to protect the client’s best interest using powerful litigation skills.

How do I remove an invalid mechanic’s lien from my property?

There are several things that can invalidate a mechanic’s lien. Perhaps the lien should have never been placed against your property in the first place. Perhaps the lien is invalid for failure to serve the affidavit in a timely manner. Perhaps the wrong statutory language was used.

While it would be nice if you could just call the lienholder and ask them to remove the lien, chances are, that isn’t going to work. If you need to remove an invalid lien, you need an attorney with exceptional litigation skills, because the dispute is most likely going to need to play out in court.

Need a Lawyer for a Mechanic’s Lien Dispute?

LloydWinter, P.C. is a full-service law firm with offices in both Texas and California.

We understand how easily people try to exploit the complexity of mechanic’s lien laws.

We aren’t intimidated by courtroom litigation, and we are devoted to supporting our clients’ rightful best interests.