How Mechanic’s Liens Work?

Apr 26th, 2015 | By | Category: Waiver Form

How Mechanic’s Liens Work?

The term mechanic lien is a common one in the real estate industry. But it is of great importance to first understand this professional term before getting to know how it works.

What is a Mechanic?

Previously, a mechanic had been defined as a person who offers services such as carpentry, plumbing and construction. However, a mechanic include of anybody who has helped in general improvement of a property.

What is a Mechanic’s Lien?

Noting that a mechanic is anybody who contributes in improving a property, a mechanic’s lien is therefore a security interest put on the title of the property for the benefit of those who have supplied materials or labor that improved the specific property. It is also known as a mechanic’s lien contract or construction lien, which prevents the property from being sold before complete payment of the mechanics. Therefore, the interests of the mechanics are protected in the contract.

So, how does a mechanic lien work? Well, this question forms the basis of discussion here below where it will be answered in a detailed discussion.

How does a Mechanic’s Lien Work?

Before filing a mechanic’s lien, you have to first understand the legal ramifications of a mechanic’s lien.

The Legal Ramification of a Mechanic’s Lien

As a contractor or any person who helped in improving a particular property, you should understand that you are only limited to filing a construction lien only on the property that you improved. It is also important to attach documents that show you were permitted or hired to work on the property by the owner.

How do you get a Mechanic‘s Lien?

You get mechanic’s lien contract after filing claims and supplying evidence of your contribution in the improvement of the property.

How exactly does a Mechanic’s Lien Work?

Once you have filed the claim, the property owner is served with a copy of lien notice. This lien notice is meant to inform the property owner that there is a hold on his/her property. The lien is also attached to the copy of the title and the land’s registry once it has been recorded by the county or city officials. The property owner is advised to honor the financial claim. He/she can also apply for release of lien upon progress payment. But this progress payment has to be honored too in order to avoid filing of another lien.

If the property owner refuses to pay financial claim, the court shall then be moved to initiate proceedings to sell the said property to help pay the contractor’s owed debt.

That is how a mechanic’s lien works to help protect the rights of contractors.

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