How to File Contract Liens

A contract lien is a way to make an owner pay for the work done on his property.

A contract lien, also known as a mechanic's lien, is filed when a property owner does not pay a contractor, subcontractor, laborer or supplier for his work or materials. Filing a lien does not guarantee that an owner will pay what he owes. However, placing a lien against the property makes it difficult for the owner to sell because potential buyers will discover the unpaid lien during a title search.

Instructions

1. Send a notice to the property owner that you intend to file a lien. Many states require contractors to let an owner know that if he does not pay his bills, a lien can be filed against his property. In cases involving subcontractors, the property owner may have paid the general contractor, but the general contractor has not paid the subcontractor. The notice will make the owner aware that there is a problem.

2. File a contract lien claim. Lien claims are filed in the county Recorder's Office of the county where the property is located. Depending on your state, claims can be filed within 60 days to 120 days from the last day work was done on the property or supplies were delivered to the property. Check with the county Recorder's Office to find out the deadline for filing the claim.

3. Send a copy of the contract lien claim to the property owner. Some states recommend sending the document by certified or registered mail within two weeks of filing it. If you are unsuccessful in finding an address for the owner, the lien claim can be posted on the property.

4. File a lawsuit in circuit court. If the property owner is unresponsive, you can foreclose on the lien by filing a lawsuit. Check with your state's lien laws to find out the deadline for filing a lawsuit. Some lawsuits can be filed within one year of filing a lien claim. Some construction contracts require settling disputes through binding arbitration rather than going through circuit court.

5. Contact an attorney. If your lawsuit progresses through civil court and ends up before a judge or a jury, you may want to consider hiring a lawyer to represent you instead of representing yourself.

References

• Ohio's Mechanic's Lien Law
• Building Industry Association of Washington-How to File a Lien
• Consumer's Guide to the Michigan Construction Lien Act