Protect monies owed with mechanic's liens.
Originally created for Car repair professionals, mechanic's liens accept taken on a still stronger presence with bona fide estate. Contractors, subcontractors, and suppliers can convenience this legal factor to benefit collect monies owed for job performed. Mechanic's liens benefit secure exceptional payments. Learning data this lien can cooperate contractors and suppliers collect their payments due.
Instructions
1. Peep all paperwork relating to the project to be completed. Be positive that it qualifies as a authentic circumstance under the territory decree. These are filed as public records notifying the that work will proceed as of the specified date. This creates a legal paper trail that the contractor or supplier can use should the need arise in a mechanic's lien action.4.
2. Prepare a "preliminary memo", relevant in some states, advising the Belongings owner that the office is eligible as the human race of a mechanic's lien. Some contractors and suppliers allow for sending these notices yet in jurisdictions that compass no requirement. This notifies the Belongings owner that yet provided subcontractors and suppliers (who enjoy no contractual consanguinity to the property owner) are unpaid, mechanic's liens can be filed.
3. Prepare and file notices of the "commencement of work," which are required in some states. Be aware that all states obtain their own mechanic's lien laws. While they are comparable, components such as when to inform, when to data, data and which court is involved can vary widely. Get down the particular administration laws that application to the project.
Prepare and file required notices of the intent to file a mechanic's lien if work goes unpaid. Be sure to file these documents in the proper offices, as they are also public records and lead to corresponding notices sent to property owners advising them that there are monies owed for completed work. This can be helpful to subcontractors and suppliers, as the property owner may have paid the general contractor, who has not paid the subcontractors or material suppliers yet.
5. File the notice of lien in the proper venue (such as the city hall or county seat). This can be confusing. States have different timing rules. Some jurisdictions specify a restricted time period from the completion of the work or installation of the materials, while others mandate that mechanic's liens cannot be filed until all construction work is completed. While four to six months is the most common time frame, closely check the state regulations to file the lien notice properly.
6. Follow up to be sure the mechanic's lien is recorded against the property. Mistakes can be made in recording offices. Keep close watch on all paperwork and written evidence of work performed and/or supplies used. These will be necessary should foreclosure action be necessary to enforce the lien. After filing and recording, the contractor or supplier will have a valid lien on the title to the property, making it very difficult, if not impossible for the owner to sell or otherwise transfer title to the real estate without paying all monies due.
