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Many contractors are in the dark and have many questions about mechanics liens. Just click below on a question that you may have and CLSI have prepared a simple answer for you. If you have any further questions please Click Here to Contact Us.
1. What is a Mechanic's Lien
2. If I supply material or labor to a worksite, but i contracted with the general contractor and not the homeowner, do I have mechanic's lien rights?
3. Does it cost money to file a mechanic's lien?
4. Who will pay me when I properly enforce my lien?
5. Does a contractor need a written contract to file a lien?
6. What if I don’t file my lien in time?
7. Do I have priority over new buyers when I’ve provided labor or materials to the property?
8. Isn’t it true that the deadbeat customer may avoid paying me by filing bankruptcy?
9. What kind of work did I have to do to have the right to file a mechanic's lien?
10. What if the work was done inside a condominium unit?
11. Do I have to file a lawsuit to collect on the money due?
12. Do I have the right to collect interest on my lien?
13. Do you have to file a lawsuit to enforce a lien?
1. What is a Mechanic's Lien?
As a basic definition, a “mechanic's lien” is a legal document filed with the proper recording authority, which if properly filed and recorded gives the holder of the lien an interest in the property. While a mortgage holder can force a foreclosure sale if the deadbeat doesn’t pay the mortgage, a holder of a mechanic's lien can force the sale of a deadbeat’s property in order to secure payment for the labor, material, or a simple service provider.
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2. If I supply material or labor to a worksite but I contracted with the general contractor and not the homeowner, do I have mechanic's lien rights?
Yes. For example, as a subcontractor, the Illinois Mechanic's Lien Act provides you with certain rights and obligations for enforcing those rights. If you follow proper procedures, you can protect yourself just as easily as the million dollar developer or contractor.
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3. Does it cost money to file a mechanic's lien?
It does cost money to record a mechanic's lien. However, it is vital that you contact a prefessional to record the mechanic's lien in order to ensure that a proper title search and review has been conducted. Only by contacting a professional like Contractor’s Lien Services, Inc., will you be able to properly enforce your rights. The recording costs are also recoverable from the deadbeat.
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4. Who will pay me when I properly enforce my Lien?
The beauty of the Mechanic's Lien Act is that you have many sources that may pay your claim. For instance, if the lien is properly filed and depending on whether you are a contractor or subcontractor, you can collect from the owner, the general contractor, title insurance company, or lender.
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5. Does a contractor need a written contract to file a lien?
Written contracts are always preferable to oral contracts to enforce a lien. However, either an oral or written contract may be enforced properly using professionals, like Contractor’s Lien Services, Inc. to assist you.
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6. What if I don’t file my lien in time?
For example, The Illinois Mechanic's Lien Act allows you to record a lien within two years of the last day you completed work on the property. It is always preferable to record your lien within four months because you are able to gain priority rights over mortgages and other lien holders. Lien rights and time constraints vary from state to state, consult a professional! If you fail to record a lien within the prescribed time, you may lose the value and power of the law and must pursue your collection through a contract claim lawsuit, which often is more expensive and time consuming. You must be aware that you have to follow notice requirements. If someone hasn’t paid you within 30 days of completion of work, you should contact an experienced mechanic's lien professional - Contractors Lien Services, Inc.
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7. Do I have priority over new buyers when I’ve provided labor or materials to the property?
In Illinois, if you record the lien within four months of completion of the work, your lien has priority over any new owners or mortgages, also called third party liens. Other states may vary.
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8. Isn’t it true that the deadbeat customer may avoid paying me by filing bankruptcy?
No. It isn’t true that bankruptcy protects the deadbeat entirely because a mechanic's lien claim has priority over the mortgage in bankruptcy. Bankruptcy doesn’t affect your lien if you are using professionals like Contractor’s Lien Services of Illinois or an experienced mechanic's lien attorney to assert your rights.
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9. What kind of work did I have to do to have the right to file a mechanic's lien?
The Mechanic's Lien Act has far reaching implications. It is impossible to compile a complete list of all the types of work that qualify under the mechanic's lien act. Some of the obvious contractors or subcontractors with lien rights are roofers, electricians, plumbers and carpenters. However, excavators, architects, engineers, crane operators, and painters are also covered. Even as a site superintendent or laborer, you have certain lien holder rights. In some states, merely providing rental equipment to a work site will provide that entity the ability to record a lien.
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10. What if the work was done inside a condominium unit?
If the work was done on the whole building, each and every condo unit shares in the liability occurred in the common areas. If the work was done in a particular unit, you can record a lien against the individual unit. When you seek to foreclose the unit, the condominium association will want to settle the matter in most cases because a proper foreclosure of the lien could lead to the sale of the unit.
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11. Do I have to file a lawsuit to collect on the money due?
Not always. However, if the deadbeat property owner files a Section 34 Demand you must file a mechanic's lien lawsuit within thirty days to enforce your rights in Illinois and Wisconsin.
A mechanic's lien makes everyone take notice of your rights. The properly filed lien can prevent a property owner from selling or refinancing the property.
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12. Do I have the right to collect interest on my lien?
Yes. The Illinois Mechanic's Lien Act allows you to collect ten 10% percent interest from the completion date if the proper lien documents are recorded. The interest provision is like money in the bank and the amount grows as you wait for your payment.
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13. Do you have to file a lawsuit to enforce a lien?
Yes. Every state has its own requirements for filing. In Illinois a lawsuit, within 2 years, is necessary to enforce your rights under the lien. However, a proper and timely lien prohibits the owner from selling or refinancing the property in many cases. In the case of a lawsuit, a complaint will allege both a right to collect under the mechanic's lien act and a right to collect pursuant to contract. Once the lawsuit results in a judgment, the process allows the claimant to collect through enforcement of the judgment, recording a memorandum of judgment, seeking a citation to discover assets and even through the non-wage garnishment proceeding.
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If you need answers CLSI professionals are standing by to assist you. CALL TODAY! 866-505-LIEN
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