Mechanics' and Materialmens' Liens on Real Property

Question 1

What is a mechanic for the purpose of this lien?

Answer 1

1. Those who build, improve, or repair buildings, or do any kind of work to repair or alter personal property.
2. Also includes those who supply materials (sometimes referred to as a Materialmen’s lien).

Question 2

A mechanics’ lien in real property may by asserted by a…

Answer 2

general contractor, subcontractor, or sub-subcontractor. Subcontractor and sub-subcontractor may assert lien against the property for money owed to them by the general contractor.

Question 3

The mechanics’ lien arises by statute and is asserted by…

Answer 3

Filing a memorandum of lien in the clerk of court’s office where the real estate is located within 90 days of completion/end of work.

Question 4

What must a memorandum of lien have?

Answer 4

1. Names and addresses of property owner and claimand
2. Amount of verified claim (and when payment is due)
3. Intent to claim a lien
4. Description of the property
5. Date from which interest is claimed
6. Claimant’s license number

Question 5

The memorandum must be mailed to…

Answer 5

the owner of the property, regardless of whether the lienholder is a general contractor, subcontractor, or sub-subcontractor.

Question 6

You can only file a mechanics’ lien to secure payment for work performed at the ______ request.

Answer 6

owner’s; not lessee’s

Question 7

A subcontractor’s lien is limited to the general contractor’s liability. You cannot use a mechanic’s lien to expand…

Answer 7

the owner’s liability.

Question 8

Subcontractors can, however, make the owner personally liable up to the amount of the general contractor’s liability if they:

Answer 8

1. Give notice to the owner before work is done, and
2. File an affidavid with the exact amount due within 30 days.

Question 9

No mechanics’ liens are allowed on…

Answer 9

Public buildings. Includes public universities. Doesn’t include churches.

Question 10

Any claim that the owner has against the general contractor may be subtracted from…

Answer 10

the claim that the general contractor, subcontractor, or sub-subcontractor has against the owner. (owner’s setoff rule)

Question 11

The mechanics’ lien is enforced by a…

Answer 11

creditor’s suit in equity.

Question 12

The mechanic must bring suit in…

Answer 12

6 months or within 60 days of end of work, whichever is later.

Question 13

What is the priority distribution for mechanics’ liens in real property?

Answer 13

First in time, first in right for mechanics’ liens. Look to the date of obtaining the lien not to the date of the work.

Question 14

What are the exceptions to the priority rules for mechanics’ liens?

Answer 14

1. Liens based on labor have priority over liens based on materials.
2. Subcontractors have priority over general contractors.

Question 15

Mechanics’ liens (are/are not) given priority over liens in real estate.

Answer 15

are not

Question 16

But, Mechanics’ liens have priority over earlier liens if …

Answer 16

the mechanics’ lien secures improvements made prior to the earlier lien.