Liens

A mechanic’s lien, also known as a construction lien, a materialman’s lien or supplier’s lien, is a security interest in the title to property for the benefit of those who provided labor or materials that improved the property.

Who May File a Lien:

If you are a general contractor, subcontractor or vendor, and have not been paid, in whole or part, you may be eligible to file a lien against the property. The lien, if filed timely, properly, and extended, if necessary, will provide additional security and a great remedy for you to get paid.

The allowable time to file a lien is determined by the type of underlying property, whether public or private, and can not be extended. The notice must be prepared and served within the allowable time and is good for one year. The lien may be extended. Actions to foreclose the lien must be brought within the extended lien period to avoid the lien becoming extinguished.

Should I file a lien?

Yes! A lien provides an interest in debtor’s assets. Several types of liens exist, all of which offer creditors additional tools or remedies that may be utilized to force payment. Security interests may be obtained before, during and after the transaction and vary depending upon the transaction. For example:

  • There are “liens” that may be filed when the underlying contract is negotiated to provide security interest in receivables, fixtures and/or inventory.
  • A lender or creditor may file a mortgage against real property to secure a loan.
  • Shares of stock may be pledged as collateral for a deal.
  • Other “liens” may be filed in the event of non-payment.
  • If someone has not been paid after making improvements to real property, he or she may file a mechanic’s lien.
  • Creditors may file “liens” as against a debtor’s bank account or other assets.
  • A Judgment creditor can place a “lien” on real property.
  • Monies owed by third parties to a judgment debtor may also be “liened” (or restrained) to pay off a judgment.

In general, liens provide a powerful means to leverage a debtor’s assets as well as give you priority over unsecured creditors.

Download a sample of Notice Under Mechanic’s Lien Law

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