Although it may sound like it would have something to do with a car, a mechanic’s lien is actually what’s used by building materials suppliers or subcontractors to ensure that they’re able to recover costs at the end of a construction project. Because the use of the word “mechanic” is confusing, many also refer to this as a materialmen’s lien.
During remodels, the general contractor is generally the party responsible for ensuring that all his or her subcontractors get paid at the end of a job. If they don’t, then supplier of materials or labor can place a lien against a homeowner’s property to recover what they’re owed.
Many homeowners may be surprised to find out that their obligation to pay doesn’t just exist between them and their general contractor. Instead, a homeowner may have a lien placed on their home even if they fully paid according to the terms of their contract.
To file a mechanic’s lien, a supplier or subcontractor first has to put a homeowner on notice of what they contributed to the job within no more than 30 days of having done the work. If they aren’t paid after notifying the homeowner of that, then they’re eligible to file a “claim of mechanic’s lien” against the homeowner in the county where the house is located.
Depending on the jurisdiction, a homeowner and his or her supplier or subcontractor have as long as six months to work out a resolution. If that doesn’t happen, then the subcontractor or supplier becomes eligible to file a lawsuit against the homeowner to recover their expenses. A set statute of limitations applies.
Once a lawsuit has been settled, the onus falls on the homeowner’s shoulders to get a court order to remove the lien or it can make it extremely difficult to sell the home.
Construction projects often involve many vendors, each with the ability to file their own materialsmen’s lien against a property if they’re not paid. Oftentimes, those who do will be paid in the order that they filed claim. If you want to give yourself the best shot of recovering your supplies or labor costs, then you’ll find it helpful to have a Denver real estate construction attorney guide you through the process of filing a lawsuit.