the Mechanic Lien Process – In 3 Simple Steps
Step 1 – Preliminary Notice:
Sending preliminary notice is the first step in the lien process. Sometimes called pre lien notice or notices to owner, preliminary notices are sent by construction parties to inform key project stakeholders of who is working on a Project. This notice also serves the purpose of protecting lien rights – most states REQUIRE that lien claimants send preliminary notice in order to later file a valid mechanics lien. But remember, sending preliminary notice is a precaution, not a reaction. It must be sent BEFORE a problem arises. Notices are like low-cost insurance specifically designed for the construction industry.
Step 2 – Notice of Intent to Lien:
Notice of intent to lien (NOI) is the final warning before a lien is filed. It gives the paying party one last chance to settle the bill before they face a mechanics lien. Nine states REQUIRE that lien claimants send notice of intent before filing a lien. Even if an NOI is not required, it is an incredibly effective tool for collecting payment. Parties making payment want to avoid being liened, and sending an NOI shows them you are serious while giving them an opportunity to resolve the dispute. Deadlines vary in states where are NOI’s are required, but the notice is typically sent after preliminary notice and few weeks before a lien is filed.
Step 3 – Mechanics Lien:
Mechanics liens are the most effective collections remedy for unpaid contractors, suppliers, and other sub-tier contractors. Filing a mechanics lien turns the job site into collateral for the payment owed to the lien claimant. Deadlines vary by state, but generally a mechanics lien must be filed within a specific time frame from the last date labor and/or materials provided. Action to enforce a mechanics lien is due within a set period of time from the date the lien was filed.
What happens if you file a lien and still aren’t paid? Here are a few options:
1. Release the lien
2. Extend the deadline to enforce the lien
3. Enforce the lien in court
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