Mechanic’s Liens Basics!

A recorded mechanic’s lien must state the amount owed to the contractor, name, and address of the contractor, name of the owner of the home, and legal description or street number of the home. Otherwise the mechanic’s lien is not valid even though recorded. A mechanic’s lien must be recorded within 60 days after the last work was performed by the (unpaid) contractor. It is good for one year after the date recorded. After one year, the lien is no longer valid unless the contractor filed a lawsuit to foreclose the lien prior to expiration of that one year period.

What can a buyer do if he bought a home and a mechanic’s lien is recorded against the home after moving in?

• Did the contractor follow all the rules discussed above?
• Did the general contractor sign a no-lien contract? If so, a subcontractor cannot record a mechanic’s lien against the home. No-lien contracts must be recorded so they can be found in the local recorder’s office.
• A buyer probably has a cause of action against the seller on their vendor’s affidavit signed at the closing. In the Vendor’s Affidavit, the seller states under oath that no work has been done on the home or that all contractors have been paid if work was done.
• A buyer can send a letter to the contractor giving them 30 days to commence suit to foreclose on their lien. If the contractor fails to file a foreclosure suit within 30 days from receipt of said letter, then their lien is void if the homeowner follows up and files an affidavit with the recorder’s office stating they sent this letter and the contractor failed to file suit. This is technical procedure which requires the hiring of an attorney to insure the procedure is correctly followed in order to void the lien. This procedure is commonly known as the “fish or cut bait” procedure.
• If the contractor has recorded a mechanic’s lien and has subsequently filed a foreclosure suit to collect on the lien, the homeowner can file a bond with the court assuring the court that the homeowner will pay on the lien if the court finds them liable. If the court approves the bond, the court will release the subject home from the lien. An attorney is recommended to be hired if this option is selected.

Obviously check with a lawyer on the above. Your local laws/customs may be different.