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.
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
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.
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.
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.