A Mechanic’s Lien is extremely useful…
and inexpensive tool available to contractors, giving them a higher degree of likelihood they will get paid for the work they performed. (Granted, it does not guarantee full or even partial payment, but sets up the legal process for a much better chance of success).
My experience is that most people do pay their obligations, and the mechanic’s lien is only used as a last resort. The great thing about liens is you can file them yourself for about $25 (depending on the jurisdiction) and with timely filing, you are simply making a legal, on-the-record statement that you are owed money from a specific person or company.
Although most companies are quite capable of filling out the basic Mechanic’s Lien documents, I encourage you to discuss the actions and process with your attorney. You may want to ask him to assist you with the first one or two and then file them on your own after that.
So How Does a Lien Work?
As I said, it varies from state to state, but in general, once you have “properly filed (perfected) your lien, you would then file a lawsuit to foreclose on the lien.
Often, at this point the person owing the debt will just pay the obligation; otherwise, the property can be sold to satisfy the debt.
If there is a mortgage, who gets paid first?
Priority determines who gets paid first. Certainly, you could force the property to be sold, but if there is a mortgage on the property for more than the property is worth, you will probably not end up with any money after all. Don’t assume, however, that this is the case. Many times the mortgage or other liens are far less than the value of the property.
Does the property have to be sold to get paid?
In many cases, once a judgment has been rendered for the lien, you can use that judgment to file against their car, or motorcycle, or even the cash in their bank account.
The goal here is not to provide legal advice, nor am I the expert on liens. I do, however, want to make you aware of another option for getting paid, and strongly encourage you to consult with your attorney.
A friend of mine filed a mechanic’s lien on a homeowner ten years ago and was recently contacted by that property owner who proceeded to pay the debt in full (including costs and interest) so he could sell his home. Without that lien filed for $25 many years ago, he would not have been paid the $4,000 he was owed (along with over $6,000 in interest, and other costs!)! Sometimes good things come to those who wait.
Dick Wagner is a National Restoration Sales Coach and Commercial Marketing Consultant. 419-202-6745