Get Paid or Foreclose
A Simple Timeline for Mechanic’s Liens
Mechanic’s liens are a great way for contractors, subcontractors, designers, and materials suppliers to ensure they are paid for their work, but the law is very strict about the process and timeline for obtaining a lien. As the landscape installation season is wrapping up, you should be sure that your company has dotted its i’s and crossed its t’s when it comes to obtaining liens. Make one mistake now and you could lose your right to a mechanic’s lien when you need to collect.
What is a Mechanic’s Lien?
A lien is an ownership right in property. Property subject to a lien cannot be sold or refinanced, and if the owner refuses to pay what they owe, you can sue them.
Who Can Get a Mechanic’s Lien?
Any contractor or materials supplier who contributes to the permanent improvement of a property has the right to pursue a mechanic’s lien.
In order to get a mechanic’s lien, you must follow a strict timeline. There are specific requirements throughout the construction process that relate to your mechanic’s lien timeline. Make sure to pay attention to the dates and times discussed below as they pertain to each project.
When you first start work on a project, you must notify the property owner in writing that they could be subject to a lien if they do not pay you for your work. If you are a general contractor, you must give this notice with the written contract for work or, if there is no written contract, within 10 days after the work is agreed upon. Subcontractors must give written notice within 45 days of when they begin working or supplying materials for the job.
Any written notice you give must comply with Minnesota law, which has very specific requirements about what is in the notice. If you are unsure about what to put in the notice, you should consult an attorney.
Serve the Lien
Within 120 days of substantial completion of the project (or supplying the materials for it) you must file and serve the lien. This means within 120 days of when you finish the last integral part of the project, and not from when you return to the site to complete punch-list items or minor change requests. The lien should be served on the property owner and filed in the county records office.
A mechanic’s lien is good for one year from the last day you did significant work on the project. If your customer does not pay, you must to take them to court or your lien will expire. In court, you can either get a judgment against the property owner or obtain a court order allowing you to foreclose and sell the property.
Pay attention to your mechanic’s lien timelines, and protect your right to lien a property if you are not paid for the work you do.