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Construction Lien FAQs

Q: What is a Construction Lien?

A: Construction Lien, also known as a Mechanic’s Lien, is a claim against a property to secure debt on behalf of a contractor, subcontractor, sub-subcontractor, material provider, or laborer.

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A Construction Lien encumbers the real property, similar to a mortgage. Meaning that as long as you have a valid Construction Lien against the property, selling the property may not be possible until the Construction Lien is discharged. Construction Lien laws vary from state to state; therefore, compliance with each state’s Construction Lien statute is highly recommended.

Q: What information should be included in a Construction Lien?

Even though each state has its own requirements, at minimum, you should include the following information in your Construction Lien document:

  • Your name and address

  • Project address

  • Legal description of the property where the project is located at

  • Name and address of the property owner or lessee

  • First date you provided labor or materials

  • Last date you provided labor or materials

  • The total contract amount

  • The amount of payment, if any, that you have already received

  • The amount that is owed to you

  • General description of the type of work that you are providing to the project

  • In some states, you have to incorporate statutory specific language

  • If you are a laborer, you must also include your hourly rate

Q: What is my deadline to file a Construction Lien?

Construction Lien deadlines are specific to each state. Even though Construction Lien deadlines are the same for both a General Contractor and a Subcontractor in many states, there are, however, some states that differentiate between the two.

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For your reference, here is the chart of each state’s Construction Lien deadline for a General Contractor and Subcontractor.

Q: How long do I have to enforce a Construction Lien?

A: The deadline to enforce or “perfect” a Construction Lien is specific to each state law. Even though the deadline to enforce a Construction Lien is the same for both a General Contractor and a Subcontractor in many states, there are, however, some states that differentiate between the two.

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For reference, here is the chart of each state’s Construction Lien deadline for a General Contractor and Subcontractor.

Q: Do I have to serve the property owner with a copy of the Construction Lien?

A: Yes. You will have to mail a copy of the filed Construction Lien to the property owner(s). Generally, the best practice is to always deliver a copy of the filed Lien to each property owner via certified mail, return receipt requested. If you are a subcontractor, it is a good idea to send a copy to the General Contractor as well.

*This article is provided for informational purposes only and should not be
considered legal advice or used as a substitute for speaking with an attorney.

 

Please consult with a licensed attorney in your state for any questions about Construction Lien or any other issues related to liens.

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