If you are a contractor, subcontractor, or supplier who has provided labor, services, or materials for a construction project in Alabama but has not received full contractual payment, filing a mechanics lien (also known as a materialman’s lien) can be an invaluable tool to recover the compensation owed to you. Mechanics liens give contractors priority and leverage when seeking payment from clients who have failed to pay invoices and balances as stipulated in the original contract.
Understanding the ins and outs of the mechanic’s lien process in Alabama is crucial for any contractor intent on recouping owed payments for work completed on projects in the state. Contact a knowledgeable Alabama construction law attorney as soon as possible to initiate the mechanics lien process and take action toward recovering rightfully earned payments.
The Benefits of an Alabama Mechanics Lien for Unpaid Work
A mechanic’s lien is a legal instrument for contractors seeking payment for services and materials already provided for a construction project in Alabama. When properly filed and enforced, a mechanic’s lien enables the lien holder to place a viable legal claim on the actual property/real estate that directly benefited from the unpaid labor, materials, or services rendered by the contractor.
Some of the most important benefits of Alabama mechanic’s liens for contractors owed outstanding payments include:
- Securing Priority for Payment: A successfully filed Alabama mechanic’s lien gives the lien holder priority for compensation over other creditors and mortgage holders, as long as the lien is filed after the commencement of the project’s construction. This priority can mean the difference between recovering payment and losing those funds to other claimants.
- Avoiding Statutes of Limitation: Mechanic’s liens eliminate the risk of losing the ability to sue for outstanding payments due to Alabama’s statute of limitations expiring. The lien preserves the right to take legal action to obtain payment.
- Creating Negotiation Leverage: The ability to place a lien on the property provides leverage in negotiations with reluctant property owners who fail to pay. Faced with the threat of potential foreclosure, owners become much more motivated to negotiate a settlement or agreement for the contractor’s outstanding payments.
- Enabling Foreclosure Rights: As a last resort if a property owner continues refusing payment, the valid Alabama mechanic’s lien gives the contractor the right to force the sale of the property through foreclosure and recover their payment from the proceeds.
The mechanic’s lien is an invaluable tool that can level the playing field and strengthen the position of unpaid contractors or other providers of labor, services, and materials for Alabama construction projects. It can mean the difference between getting fully paid what is owed, and never recovering rightfully earned compensation.
Properly Serving Notice for Your Alabama Mechanic’s Lien
Alabama mechanic’s lien laws stipulate precise requirements for serving legal notice to impacted parties. Proper notice must be made for the lien to be valid and enforceable. Key notice procedures include, among others, properly serving a preliminary notice of intent before commencing work and/or delivering materials in order to be entitled to seek a lien for the full amount, serving notice of intent to file a lien on the property owner, filing and recording a verified statement of lien in the probate records of the county where the work was performed or materials supplied which contains all of the statutory requirements.
Proper service according to Alabama law is vital to an enforceable mechanic’s lien. Dependable Alabama construction attorneys can facilitate serving all necessary notices accurately.
In Alabama, original contractors who contracted directly with the property owner must file and record their verified statement of lien within six months from the date that the last item of work was done or last item of material was supplied; whereas every other person entitled to a mechanic’s lien including subcontractors and suppliers have only four months.
Enforcing a Valid Alabama Mechanic’s Lien to Recover Payment
Once the Alabama contractor has properly filed, recorded, and served notice for their mechanic’s lien within the required time limitations, they must take action to actively enforce the lien if the client continues to refuse payment of the outstanding balance. Following these key steps will enable you to enforce and satisfy an Alabama mechanic’s lien:
- File Lawsuit Within 6 Months to Enforce: The first step is filing a lawsuit to enforce the mechanic’s lien in county Circuit Court within 6 months of the date on which the amount owed became due. This lawsuit names the property owner, other lien holders, and any other party claiming an interest in the property and seeks a court judgment that formally establishes your lien as valid and enforceable against the property and a foreclosure sale of the property if payment isn’t made by a specified date.
- Obtain Writ Ordering Sale: If the judgment payment date passes, the contractor then seeks a Writ of Execution from the court ordering the county Sheriff to sell the property at public auction, applying proceeds to satisfy the lien.
- Bid at Foreclosure Sale if Needed: The contractor should be prepared to attend the auction and bid if necessary to recover payment from the sale proceeds per Alabama foreclosure laws. Any surplus proceeds go to the owner and lower-priority lien holders.
With an enforceable Alabama mechanic’s lien perfected through the required legal procedures, contractors, subcontractors, suppliers and others have a straightforward process to follow for pursuing payment owed, including foreclosure sale of the owner’s property if required as a last resort. Consult capable legal counsel for guidance on enforcing and satisfying Alabama mechanic’s liens. Don’t wait – take action today.
Contact a Skilled and Knowledgeable Alabama Construction Law Attorney
Pursuing compensation owed through a properly filed and enforced Alabama mechanic’s lien can empower contractors to recover rightful payment even from unwilling or unresponsive property owners. However, strict adherence to filing deadlines and service of notice procedures is mandatory. To ensure that everything is filed properly, and all of the crucial steps are followed, it is best to work with a reputable construction law attorney.
In Alabama, contact Stone Crosby by calling (251) 626-6696 or sending us an online message. We are ready to go to work for you!