Mechanic's Liens
The Mechanics' Lien law provides special protection to contractors, subcontractors,
laborers and suppliers who furnish labor or materials to repair, remodel or build your
home.
If any of these people are not paid for the services or materials they have provided, your
home may be subject to a mechanics' lien and eventual sale in a legal proceeding to
enforce the lien. This result can occur even where full payment for the work of
improvement has been made by the homeowner.
The mechanics' lien is a right that a state gives to workers and suppliers to record a lien
to ensure payment. This lien may be recorded where the property owner has paid the
contractor in full and the contractor then fails to pay the subcontractors, suppliers, or
laborers. Thus, in the worst case, a homeowner may actually end up paying twice for the
same work.
The theory is that the value of the property upon which the labor or materials have been
bestowed has been increased by virtue of these efforts and the homeowner who has
reaped this benefit is required in return to act as the ultimate guarantor of full payment to
the persons responsible for this increase in value. In practice, a homeowner faced with a
valid mechanics' lien may be compelled to pay the lien claimant and then pursue
conventional legal remedies against the contractor or subcontractor who initially failed to
pay the lien claimant but who himself was paid by the homeowner. Another justification for
this result relates to the relative financial strengths of the parties to a work of
improvement. The law views the property owner as being in a better situation to absorb
the financial setback occasioned by having to pay the amount of a valid mechanics' lien,
as opposed to a laborer or material man who is viewed as being less able to absorb the
financial burdens occasioned by not being paid for services or materials provided in
connection with a work of improvement.
The best protection against these claims is for the homeowner to employ reputable firms
with sufficient experience and capital and/or require completion and payment bonding of
the construction work. The issuance of checks payable jointly to the contractor, material
men and suppliers is another protective measure, as is the careful disbursement of
funds in phases based upon the percentage of completion of the project at a given point
in the
construction process. The protection offered by mechanics' lien releases can also be
helpful.
Even if a mechanics' lien is recorded against your property you may be able to resolve the
problem without further payment to the lien claimant. This possibility exists where the
proper procedure for establishing the lien was not followed. While it is true that
mechanics' liens may be recorded by persons who have provided labor, services, or
materials to a job site, each is required to strictly adhere to a well-established procedure
in order to create a valid mechanics' lien.
Needless to say, this is one area of the law that is very complex, thus it may be worthwhile
to consult an attorney if you become aware that a mechanics's lien has been recorded
against your property. In the event you discover that a lien has been recorded but no effort
has been made to enforce the lien, a title company may decide to ignore the lien.
However, be prepared to be presented with a positive plan to eliminate the title problems
created by this type of lien. This may be accomplished by means of a recorded
mechanics' lien release from the person who created the lien, or other measures
acceptable to the title company.
As in all areas of the real estate field, the best advice is to investigate the quality, integrity,
and business reputation of the firm with whom you are dealing. Once you are satisfied
you are dealing with a reputable company and before you begin your construction project,
discuss your concerns about possible mechanics' lien problems and work out, in
advance, a method of ensuring that they will not occur.
laborers and suppliers who furnish labor or materials to repair, remodel or build your
home.
If any of these people are not paid for the services or materials they have provided, your
home may be subject to a mechanics' lien and eventual sale in a legal proceeding to
enforce the lien. This result can occur even where full payment for the work of
improvement has been made by the homeowner.
The mechanics' lien is a right that a state gives to workers and suppliers to record a lien
to ensure payment. This lien may be recorded where the property owner has paid the
contractor in full and the contractor then fails to pay the subcontractors, suppliers, or
laborers. Thus, in the worst case, a homeowner may actually end up paying twice for the
same work.
The theory is that the value of the property upon which the labor or materials have been
bestowed has been increased by virtue of these efforts and the homeowner who has
reaped this benefit is required in return to act as the ultimate guarantor of full payment to
the persons responsible for this increase in value. In practice, a homeowner faced with a
valid mechanics' lien may be compelled to pay the lien claimant and then pursue
conventional legal remedies against the contractor or subcontractor who initially failed to
pay the lien claimant but who himself was paid by the homeowner. Another justification for
this result relates to the relative financial strengths of the parties to a work of
improvement. The law views the property owner as being in a better situation to absorb
the financial setback occasioned by having to pay the amount of a valid mechanics' lien,
as opposed to a laborer or material man who is viewed as being less able to absorb the
financial burdens occasioned by not being paid for services or materials provided in
connection with a work of improvement.
The best protection against these claims is for the homeowner to employ reputable firms
with sufficient experience and capital and/or require completion and payment bonding of
the construction work. The issuance of checks payable jointly to the contractor, material
men and suppliers is another protective measure, as is the careful disbursement of
funds in phases based upon the percentage of completion of the project at a given point
in the
construction process. The protection offered by mechanics' lien releases can also be
helpful.
Even if a mechanics' lien is recorded against your property you may be able to resolve the
problem without further payment to the lien claimant. This possibility exists where the
proper procedure for establishing the lien was not followed. While it is true that
mechanics' liens may be recorded by persons who have provided labor, services, or
materials to a job site, each is required to strictly adhere to a well-established procedure
in order to create a valid mechanics' lien.
Needless to say, this is one area of the law that is very complex, thus it may be worthwhile
to consult an attorney if you become aware that a mechanics's lien has been recorded
against your property. In the event you discover that a lien has been recorded but no effort
has been made to enforce the lien, a title company may decide to ignore the lien.
However, be prepared to be presented with a positive plan to eliminate the title problems
created by this type of lien. This may be accomplished by means of a recorded
mechanics' lien release from the person who created the lien, or other measures
acceptable to the title company.
As in all areas of the real estate field, the best advice is to investigate the quality, integrity,
and business reputation of the firm with whom you are dealing. Once you are satisfied
you are dealing with a reputable company and before you begin your construction project,
discuss your concerns about possible mechanics' lien problems and work out, in
advance, a method of ensuring that they will not occur.
Still have questions? Contact me today for a
free consultation!
free consultation!
Colin O’Neal
Buyer’s Agent
200 North Rufe Snow Drive, Ste.102
Keller, TX 76248
(817) 898-0145 Office
(817) 898-1771 Fax
colin@househuntersdfw.com
Buyer’s Agent
200 North Rufe Snow Drive, Ste.102
Keller, TX 76248
(817) 898-0145 Office
(817) 898-1771 Fax
colin@househuntersdfw.com
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