If you are a subcontractor or supplier who provided goods or services to a general contractor, it can be very frustrating when you do not receive payment in a timely fashion. One option that is available to you in this scenario is to file a mechanic’s lien against the property itself. This shifts the responsibility for paying you to the owner of the property.
In the eyes of the law, your need to receive payment is greater than the needs of the property owner. Therefore, if you are unable to collect payment from the general contractor, it is perfectly legal for you to file a mechanic’s lien against the property owner even though he or she fulfilled the responsibility to pay the contractor.
It can be helpful to know how a mechanic’s lien works, as well as what to do after you receive payment.
How to file a mechanic’s lien
If you have not received payment from the general contractor within 20 to 30 days of your contribution, you have a responsibility to file a claim of mechanic’s lien with the county government of the property’s location. Additionally, you must provide notice of your contribution to the owner of the property. The next step is usually to work out a solution with the property owner. You have two to six months to do this. If you cannot work out a solution with the property owner, your only remaining solution may be to file a lawsuit.
What happens after you receive payment
A mechanic’s lien does not automatically disappear after you receive payment or if it expires. Once you resolve the matter, one way or another, with the property owner, you need to cancel the lien yourself. Otherwise, you may find yourself facing a lawsuit from the property owner. Your chances of winning such a lawsuit are not good, so it is better to avoid it in the first place by cancelling the lien once you receive payment.