Mechanic’s liens allow contractors, subcontractors, suppliers, and other construction industry parties to secure payment for their work on non-public real property projects. However, property owners often raise various defenses to challenge the validity of such liens. Knowing these common defenses can help both lien claimants file proper liens as well as assist property owners in objecting to defective liens.
The Nature of Mechanic’s Liens in Alabama
In the realm of construction, the mechanic’s lien, also known as a materialman’s lien, acts as a lifeline for many. It serves a dual purpose:
- Protection for Lien Claimants: Essentially, a mechanic’s lien ensures that those who furnish labor or materials for a construction project have a security interest in the property until they are compensated. It is the law’s way of acknowledging that these individuals and entities, be they general contractors, material suppliers, or subcontractors, have added value to the real property and deserve payment.
- Ensuring Payment for Services: The mechanic’s lien for the amount of the unpaid balance is a lien against title to the real property which means the property can be sold to fulfill the debt if necessary.
The Importance of Preliminary Notice
Before a lien is officially recorded, there are steps to ensure all parties are informed:
- Required Preliminary Notice: In Alabama, like in many states, there is an expectation for the lien claimant to send a preliminary notice informing the property owner about his/her intention to file a lien.
For instance, original contractors who have a direct contract with the owner typically don’t need to provide notice. However, other persons involved in the project, like material suppliers, might have this requirement.
- Consequences of No Notice: The mechanic’s lien can be invalidated if the preliminary notice isn’t correctly served, making it a prime defense for property owners.
Common Defenses against Mechanic’s Liens
When faced with a mechanic’s lien, property owners often turn to these defenses:
Improper Notice or No Notice
A strong defense arises when there’s an absence of required preliminary notice or if the written notice wasn’t correctly served. In these cases, the mechanic’s lien claim can be disputed. Given the importance of such notices, it’s critical for all parties to understand their roles in the mechanic’s lien process.
Deficiencies in the Statement of Lien
Alabama requires lien claimants to file a verified statement of lien. This document must contain detailed information about the claim. Any error or omission can render the lien unenforceable. Property owners should, therefore, scrutinize this document for inaccuracies.
Discrepancies in the Contract with the Owner
Contracts are the backbone of any construction project. But what happens when there’s a dispute regarding the entire contract balance, the full price, or the unpaid balance in the contract? If a lien is based on a faulty or non-existent contract, it can be challenged.
Overstated Lien Amount
Another common defense is when the lien claim is for more than the unpaid balance. For example, if a lien claimant is only owed a partial amount (an unpaid balance lien) but claims the full-price lien (entire indebtedness), the property owner can dispute the entire lien.
Timeliness of the Lien
Time is of the essence in the world of mechanic’s liens. The Alabama code specifies enforcement deadlines. If a lien claimant doesn’t file the lien within the stipulated time period after the last date of furnishing labor or materials, the lien can be contested.
Property Location Mismatch
Ensuring the accuracy of where the property is located is crucial. A lien filed against the wrong property or with an incorrect property description is a prime candidate for dismissal.
Payments and Setoffs
Payments already made by the property owner can significantly influence the validity of the lien. If payments aren’t adequately accounted for in the lien, the owner can challenge the entire indebtedness secured by the lien.
The Role of General and Original Contractors
The construction world is filled with various roles, each bearing its unique responsibilities:
- General Contractors: These entities usually have a direct contract with the owner and are primarily responsible for the entirety of the construction project. They may not always need to provide preliminary notice before filing a mechanic’s lien.
- Original Contractors: While similar to general contractors, these entities may sometimes be subcontractors or material suppliers who might have specific requirements like providing notice to the owner prior to filing a lien.
Legal Procedures and Mechanic’s Liens
Alabama law ensures that the mechanic’s lien process is fair for all parties involved:
- Courts: The probate court, district court, and circuit court all play roles in the adjudication of mechanic’s liens, ensuring that all parties have an avenue for justice.
- Alabama Code: The specific statutes within the Alabama Code dictate the intricate processes of mechanic’s liens. Any misstep in adhering to these laws can invalidate a lien, making legal advice paramount.
Contact Our Experienced Southern Alabama Mechanics Liens Lawyers
Mechanic’s liens serve as a protective measure for those in the construction industry. However, when these liens are contested, it is essential to know the defenses available. If you need any legal guidance with construction liens in Alabama, contact Stone Crosby for assistance. Call us today at (251) 626-6696 or message us online to set up a personalized consultation.