If you have never heard about a mechanic’s lien, or you have heard the term but do not really know what a mechanic’s lien is, you are not alone. There are many things to know about when you own your own home and plan on remodeling or have improvements made on your property. Below, we are going to discuss what a Mechanic Lien is and how to properly avoid one during your home improvement process.
What is a Mechanic’s Lien?
The legal definition of a mechanic’s lien is the right of a craftsman, laborer, supplier, architect or other person who has worked upon improvements or delivered materials to a particular parcel of real estate (either as an employee of the owner or as a sub-contractor to a general contractor) to place a lien on that real property for the value of the services and/or materials if not paid. In layman’s terms this means that the contractor and any subcontractor or material supplier for a building project can go to court and try to take possession of your property if they are not paid.
How to protect yourself from a lien?
In order to protect yourself from having liens filed against your property, you should have the contractor list in the contract the names of all anticipated subcontractors and material suppliers. Be sure to keep track of any notices you may receive and before making a final payment; be sure you have received lien waivers signed by each of the subcontractors. At Lindus Construction we pre-lien every job ensuring the protection of our customers as well as ourselves.
You only have to pay once if you ask for the lien waiver!
If you obtain a valid lien waiver from the subcontractor, or if you pay the general contractor in full before receiving the notice from the subcontractor, you cannot be forced to pay for the services or material a second time if the contractor fails to pay the subcontractor.
Steps to avoiding a lien on your property
- Hire a reliable, reputable contractor who has been in business for a number of years.
- Use a written contract that lists the subcontractors and suppliers for each stage of work you are requesting and outlines progress payments on completion of each stage.
- Actively supervise the project and ensure any changes to the original contract are noted.