what is a mechanics lien?

What is a Mechanic’s Lien?

There are a lot of parties that are involved in a construction project. With a typical project, there are contractors, subcontractors, laborers, material suppliers, and many others. Property owners and building owners are legally obligated to pay for all work completed on the project as long as there is a valid contract or agreement in place, and when a responsible party fails to pay, a mechanic’s lien can be filed.

Mechanic’s liens a/k/a materialmen liens are very useful tools for unpaid parties in a construction project. If the owner fails to pay the amount owed, a lien is attached to the property, which means that the property cannot be sold until the lien is satisfied.

If you are dealing with an owner who owes you money for materials or services provided on a construction project in Alabama, Stone Crosby, P.C. is here to help. Our attorneys have helped numerous contractors, subcontractors, and materialmen effectively enforce their legal rights, and we have an in-depth understanding of the mechanic’s lien process. Call our Daphne, AL office today at (251) 626-6696 to speak with a member of our legal team.

What is a Mechanic’s Lien?

A mechanic’s lien is a legal document that is often used by various parties to help recover payment for materials or services that they have been commissioned to perform. The name “mechanic” is a bit misleading in this context. Although auto mechanics are among the parties that may seek a mechanic’s lien, this remedy is most often used by those who are connected with the construction industry.

A mechanic’s lien attaches to the title of the property that was constructed or renovated, which becomes part of the public record. This makes it very difficult for the owner to sell the property until the lien is paid or otherwise dealt with. In addition, nearly all lenders are unwilling to refinance the property or approve a second mortgage/equity line of credit if there is an unsatisfied lien.

For these reasons, mechanic’s liens are a major nuisance for property owners to have hanging over them, and they provide a significant amount of leverage for unpaid parties. Although they may not get paid immediately, there is a good chance that they will receive payment at some point in the future if they have a lien on the debtor’s property.

Important Things to Know About Alabama Mechanic’s Liens

A mechanic’s lien is often a very effective legal remedy for an unpaid party from a construction job, but before pursuing this avenue, there are some important things to be aware of:

There are Two Different Types of Mechanic’s Liens in Alabama

The types of mechanic’s liens that can be filed in Alabama are a full-price lien and an unpaid balance lien. A full-price lien allows a claimant to file a lien for the entire contract balance that is owed for the project. Only certain parties are allowed to file a full-price lien, which includes an original contractor who has a direct contract with the owner and materialmen who have furnished the owner with a required preliminary notice before supplying any material.

An unpaid balance lien is used to recover the remaining balance on materials supplied or services rendered through the date that the lien is filed. This type of lien applies to subcontractors and other parties who do not have a direct contract with the owner and did not furnish the owner with the required preliminary notice. It also applies to parties who did furnish the required preliminary notice, but the owner objected to it.

If the work being performed on a project requires a license, then the contractor or subcontractor should have the required licensing in order to legally assert a mechanic’s lien.

Subcontractors Must Provide Owners with a Notice of Unpaid Lien before Filing

Alabama requires subcontractors and materialmen to deliver a notice of their intent to file a lien to the owner before filing the lien. General contractors who have a direct contract with the owner may not be required to provide this notice.

There are Strict Filing Deadlines for Mechanic’s Liens

In Alabama, there are specified deadlines for the filing of mechanic’s liens ranging from 30 days to six months depending on whether the lien claimant is the original contractor or a subcontractor or supplier.

The deadline for original contractors is six months from the date the last item of work or labor was performed or the last item was supplied to the property, while subcontractors and suppliers have four months

Mechanic’s Liens also Have Enforcement Deadlines

Once the mechanic’s lien has been filed, that is not the end of the process. If the owner does not satisfy the lien in a timely manner, the unpaid party will need to file a lawsuit to enforce the lien to ensure that their legal rights will continue to be protected. This process is commonly known as “perfecting the lien”. In Alabama, the mechanic’s lien enforcement deadline is six months after the maturity of the indebtedness, which is when the debt became due. If a lawsuit to enforce the lien is not filed within the allotted timeframe, the lien is no longer enforceable against the property.

Speak with a Seasoned Daphne, AL Construction Law Attorney

To learn more about your legal rights as an unpaid contractor, subcontractor, or material supplier on a construction project, contact Stone Crosby, P.C. for assistance. Call our Daphne, AL office today at (251) 626-6696 or send us an online message to set up a personalized consultation with one of our attorneys.