Ohio home builders can protect themselves with a mechanic’s lien

On Behalf of | Oct 15, 2019 | Business Litigation |

 Those working in home construction and repair in Ohio may not always receive the full payment for the construction project all at once, especially if the cost is high. A mechanic’s lien can help protect workers by guaranteeing they will get paid.

What is a mechanic’s lien?

According to Investopedia, the mechanic’s lien was developed by Thomas Jefferson. In the event that the homeowner defaults on the mortgage before the payment for the project is made in full, resulting in the liquidation of the property, a mechanic’s lien can ensure priority in paying workmen before anyone else.

How does a mechanic’s lien work in Ohio?

Each state governs the implementation of mechanic’s liens in its own way. The Ohio Revised Code states that contractors who have a lien are entitled to secure payment for any work completed if that payment has not been completed in full. However, the amount to be paid out may not be greater than the original cost of the project as outlined in the home construction contract.

It is important to note that once the full payment has been made on a project, any associated mechanic’s liens become void. However, in the instance that the homeowner has been found guilty of committing fraud, the lien will not become void, even if the project was apparently paid in full. This clause provides an added layer of protection in case the money used to pay the contractor ended up being illegitimate due to fraudulent action on the part of the homeowner. As long as the lien remains valid, all contractors and workers have a claim to any outstanding payments owed on the project.

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