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Understanding Mechanic's Liens


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									 L AW & B U S I N E S S

         Understanding Mechanic’s Liens
         By Nancy Chillag

                 n today’s economic cli-                          vary slightly from state to state,    if you need to mail a copy to the

            I    mate, many contractors,
                 both general and special-
                                                                  provide basic procedures for
                                                                  notifying a homeowner that his
                                                                                                        homeowner or if the recorder
                                                                                                        will do the mailing.
         ty, are finding they are not get-                        property might be subject to a            There are specific
         ting paid for the work they have                         lien and then recording and per-      timelines for recording
         performed. This can be due to                            fecting the lien.                     the lien. Usually it is 90
         the homeowner running out of                                                                   days after the project is
         money or the general contractor                          Preliminary lien notices              substantially complete or
         using the money paid to him to                               If you are a subcontractor or     earlier (30 to 60 days) if
         cover his mortgage instead of                            a supplier, the homeowner does        the owner records a notice
         paying his subcontractors. In                            not know that you are perform-        of completion. If you don’t
         fact, many general contractors                           ing work on their property. You       meet the deadline, your
         are declaring bankruptcy, leaving                        have contracted with the general      lien is invalid. Many times
         their subcontractors and suppliers                       contractor for your services, and
         in the lurch.                                            the general may or may not have
             How do you protect yourself?                         informed the homeowner of your
         One way is to take advantage                             existence. The law requires you             Mechanic’s lien laws were developed
         of the mechanic’s lien laws of                           to tell the homeowner that you
         your state. Mechanic’s lien laws                         are doing work on their property
                                                                                                               to protect contractors who provide
         were developed to protect con-                           and that you have a right to lien            valuable services to a property and
         tractors who provide valuable                            their property if you are not
         services to a property and then                          paid. There are specific forms
                                                                                                                       then don’t get paid.
         don’t get paid. The laws, which                          to use and a copy must be sent
                                                                  to the homeowner, the general
                                                                  contractor and a lender if the        you will be told “the check is      of time (usually 90 days) before
                                                                  project is subjec
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