Mechanic’s liens and construction defects laws can protect your real estate investment
Design professionals, contractors and subcontractors who provide services, labor, or materials to improve real property can file liens as a means to ensure that they get paid for their work. In exchange for following these proper procedures, a lien claimant can receive the following benefits:
- A lien can attach to the real property where materials were delivered or where construction took place. This is a powerful tool because it can result in a court directing that the property be sold to satisfy the lien. Equally important, filing a lien can mean that your claim is paid before a mortgage (or judgment) that is later attached to the property is paid. Who gets paid when a property is sold may come down to who properly filed a lien and who did not
- A lien claimant can recover their attorney's fees spent in a lawsuit filed to recover payment on the lien
- Where a subcontractor gives notice of a claim of lien, the owner must retain sufficient funds to cover the lien. If the owner fails to do so, then they will become personally liable to the subcontractor
Lien claims must be filed in the Clerk of Courts office where the property is located, within 120 days of the lien claimant’s last date of furnishing labor, materials or services. To enforce the lien, a lawsuit must be filed within 180 days of a lien claimant’s last date of furnishing labor, materials or services. A properly filed lien has few disadvantages while an improperly filed lien, however, can lead to a loss of your lien rights.
Cardillo Keith Bonaquist can help you file a lien or work with you on liens unfairly or wrongly filed, as well as any construction-related defects.