How to Know When to File a Mechanics Lien

Mechanics' liens developed after car mechanics would fix cars and not get paid after the work was done. Since mechanics do the work first and get paid second, they needed some type of protection to guarantee that they would be compensated for their work. The lien has evolved to cover contractors, subcontractors, car mechanics and a few other professions. These steps will help you decide when to file one.

Instructions

Difficulty: Challenging

1. Check the state statute. Mechanics' lien laws vary from state to state. There are general guidelines, but consult the state statute before filing the lien. State statutes are becoming more readily available online. Check your state's website and see if the code or statutes in your state are online. Go to a law library at a local law school or courthouse. Ask the librarian for the statute on mechanics' liens.
2. Wait for a default by the owner. Many times you know or have a feeling that someone isn't going to pay their bill, but you have to wait until they have failed to pay the bill before acting. If there is a grace period, wait for the grace period to expire as well.
3. Give the debtor preliminary notice. You can't file the lien until they have had notice that you are going to do so. Let them know that there is a problem with the bill and that it needs to be worked out. Try to negotiate on your own or through an attorney. It is cheaper to avoid attorney bills and court fees. If that fails, send a preliminary notice to the debtor including the names and addresses of the parties involved, a description of the labor and services, and a description of the work site.
4. Wait for a response. Give the person a little time. If they can't respond or won't respond, go forward with the mechanics lien. Consult an attorney and file the lien.