An Overview of Mechanic’s Liens

Anyone working as a contractor needs to understand what a mechanic’s lien is and how they can effectively help protect your business. A simple definition is that a mechanic’s lien is a security interest to a piece of property (real property or personal property) that is put in place in order to ensure that someone who has provided labor and/or materials to improve the property receives the money due for the service or supply they provided.

Example of a Mechanic’s Lien

A simple example of this would be if a company was hired to renovate an apartment building. While they may receive some payment up front, they will often have to buy supplies and provide the bulk of the labor before getting paid. In order to ensure they will get compensated for their work, a mechanic’s lien can be placed on the customer’s property. If the customer doesn’t pay as agreed, it is possible to force the sale of the property and get paid out of the proceeds.

Other Names for a Mechanic’s Lien

Mechanic’s liens are known by several other names, typically for different situations when they are used. Someone who supplies contractors or jobs with materials will often call it a materialman’s lien, or a supplier’s lien. Designers may call it a design professional’s lien. The contractor who is doing the actual work may call it a laborer’s lien. Each of these names is referring to the same legal concept of a mechanic’s lien.

When to File a Lien

The lien cannot be filed until after the work is completed and payment has not been made. This helps to protect property owners from having unnecessary liens filed against them, and also makes it so contractors don’t have to go through the process of filing for a mechanic’s lien every time they do a job. If it does become necessary to file a lien, you will need to notify the customer that you are filing a lien so that they are aware. This can sometimes help encourage them to make the payments they are owed.

Filing & Enforcing Mechanic’s Liens

It is important to take the time to ensure these liens are filed correctly in order to avoid delays, or even the loss of your right to collect. Having an attorney help to file the necessary documents is critical for any contractor, supplier, or other construction-related business. Contact the Law Office of Ray Garcia to see how we can work with you to ensure your liens are handled correctly, and your business is protected.

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Law Office of Ray Garcia, P.A.

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