Understanding The Mechanics Lien

Mechanics Lien

• Legislation allows those providing work/materials for construction or repair of property to claim interest until payment.
• Rental equipment companies can also place a lien.

Registering a Lien

• A lien needs to be registered at the Registry.
• Must include: name and address of the claimant, owner/agent details, details of work/material provided, time work was done, description of the work done, sum that is due, land description.
• Paperwork must be completed in duplicate.

Lien Priority

• When a lien is registered, only a mortgage used as security is paid out before the lien.
• Judgments, attachments, or garnishments are paid after a lien is satisfied.
• When multiple claims are made, none can be prioritized; payment is based on percentage owed to avoid fraudulent preference.
• Workers wages generally rank higher in payout.

Removing a Lien

• After registration, a lien can be removed by: paying the claimant to remove the lien or paying the owed amount plus security fees into the court, which may release the lien.
• Security fees are $50,000 per lien or 25% of the money owed, whichever is less.

Lien Process

• Preserving Lien Rights requires filing within 30 days after work completion or project abandonment.
• Perfecting Lien Rights requires filing a statement of claim after preserving the lien right and within 90 days of work completion or project abandonment.
• A statement of claim must be served within 30 days after filing.
• A statement of defense must be delivered in 10 days.

Additional Information

• Lien claimants can file together as one claim.
• You can waive your lien rights, but cannot waive lien rights for someone else.
• A supplier to a subcontractor can still lien, even if the subcontractor waives their rights with a general contractor.