Three Important Questions About Mechanics Liens
Are you working as a contractor on a big construction project, but you have not yet been paid the money that you are owed for the job you performed? If so, know that you can leverage a mechanics lien in order to get paid. Here are a few things that you need to know about mechanics liens.
Who Can Use A Mechanics Lien?
Only some people are qualified to use a mechanic's lien to receive the compensation that they deserve. This includes suppliers, contractors, subcontractors, and essentially any company that supplied materials or labor for a construction project. However, you could not use a mechanics lien if you work as an employee for a company that acted as a subcontractor. The owners of the company you work for would be the ones responsible for pursuing a mechanics lien.
Is There A Time Limit To File A Mechanics Lien?
Every state has its own laws regarding how long you have to wait in order to use a mechanics lien, and then a statute of limitations regarding a maximum length of time as well. Thankfully, it's easy to figure out because all laws are based on the date that the work was completed or the materials were supplied for the construction.
For example, the state of Illinois requires that you wait 4 months without being compensated before you can use a mechanics lien, and then you have 2 years from the last date that you worked to start the process. It may seem like a very long time, but it's easy to lose track of missed payments if they are smaller.
How Does A Mechanics Lien Help Get You Paid?
Remember when you purchased a home and you had to pay a title company to make sure that the deed was free and clear of any debts before you could purchase it? The title company was checking for things like mechanics liens that could prevent the sale of the property from happening until the liens are cleared.
A mechanics lien can prevent the owners of a commercial property from selling the building, getting a loan, or refinancing their existing loan. It can even cause a property to be foreclosed on in some situations, which will force the owner to pay you for the compensation you are owed.
Reach out to a lawyer if you need assistance with a mechanics lien for a commercial or residential property you worked on.