An attorney with our law firm will be happy to answer your mechanics lien questions and concerns.
While most business owners who perform services on, or supply materials for, real property and the fixtures on such property know that a mechanics lien may offer them a remedy for a debt owed for such services or goods, a great majority may not be aware of the strict legal technicalities associated with pursuing a mechanics lien claim.
A mechanics lien is a creature of statutory law for a claim for value of labor, materials, or equipment used in the improvement of real property. It is attached to the real property creating an encumbrance on the property and a possible right to foreclose on the property to satisfy the claim from the proceeds of the sale of the land.
Many of the technicalities of a mechanics lien, however, are associates with its "perfection," properly encurmbering the property in strict accordance with statutory requirements. It is advsible to consult with lawyer in your jurisdiction familiar with the mechancs lien statute and common law rules of your state. Simply reading the applicable mechanics lien statute reveals little with regard to how state courts have interpreted the statute.
Most mechanics lien statutes have a surprisingly short deadline by which the lien must be filed and served after the services, materials, or equipment at issue have last been provided. If a mechanics lien is not filed and served within such time the right to do so is forever lost. A contractor or materials supplier can easily miss the deadline to file and mechanics lien while being patient or playing "nice" in the hope that a client will pay them. Again, communicate with an attorney in the state where the real property is located to learn the length of the filing deadline
Once a lien is filed, the claim still must be brought before a court. Again, there is a deadline before which a suit to foreclose the mechanics lien must be brought, which is in effect to file suit against the debtor with the possibility of having the real property foreceably sold and the proceeds from the sale applied to the judgment amount awarded by a judge. Also, individual owners cannot generally represent any business entity in which they operate in such foreclosure proceedings. That would be the unauthorized practice of law and can only be done by an appropriately licensed attorney.
Different state jurisdictions impose different deadlines for filing the mechanics lien and for foreclosing on the lien, as well as widely different procedural requirements for filing and the lien.
For example, some states allow the parties to offer settlements to each other in the course of prosecuting their cases, with the party whose offer comes closest to actual judgement being awarded attorney fees. The upshot of this is that a party can prevail in its mechanics lien case, but still have to pay the attorney's fees for the other, losing, party. While it is a contradiction to award attorney's fees to a losing party just because it made the offer of settlement closest to the judgement amount awarded, it is believed that risk of having to pay the attorney fees of the other party encourages settlement in mechanics lien cases.
Because of these strict deadlines and procedures, mechanics liens are not always the preferred method for collecting a debt related to real property. But when it is, it can be an effective remedy if done properly with the guidance of a lawyer or attorney.
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