Contractors can ensure that they are paid by filing a mechanics lien.
A mechanic's lien is a statutory device that allows unpaid contractors, subcontractors and material suppliers to take a security interest in the debtor's property. A properly attached mechanic's lien will prevent the debtor from holding clear title to the effected property until the debt is paid. Minnesota's mechanic's lien statute must be followed exactly, or the lien will not properly attach and the debt will not be secured.
Instructions
1. Give notice to the property owner. The creditor must give pre-lien notice to the property owner that a debt is owed and that the creditor is pursuing a mechanic's lien. The creditor does not have to give notice when the contractor is the owner of the property, when the unpaid work was done on an apartment building with more than four units or when the unpaid work was done on a commercial property of more than 5000 square feet. The requirements for giving notice differ for contractors, subcontractors and material suppliers. Minnesota Statute section 514.11 provides instructions on how and when each party should give notice.
2. Retain a copy of the notice and affidavit. When the creditor gives proper notice he will receive a copy of the notice and an affidavit. Keep these documents in a safe place because they will have to be produced if the lien is enforced.
3. Record a Mechanic's Lien Statement against the creditor's real property. The mechanic's lien statement must be recorded within 120 days of the last day work was done or materials were supplied. Among other information, the statement must include the property address, the name of the owner, the amount owing on the project, and the first and last days work was performed on the property. Minnesota statute section 514.08 provides a complete list of everything that must be included in the statement. The Mechanic's Lien Statement is filed with the county recorder of deeds.
Tips Warnings
If the creditor is not paid, he may foreclose on the lien. This process is much like foreclosing on a mortgage. Minnesota statute requires that foreclosure proceedings begin not more than one year after the work was finished on the property.
Keep all records of the mechanic's lien and work done on the property because they must be produced during the foreclosure process.
This article is for informational purposes only. This article in no way represents legal advice or counsel. Always contact a licensed attorney in your area before making important legal decisions.
Related Posts:
The Cheapest Way To File For Divorce
If you and your spouse are able to prepare the paperwork and reach agreements outside of court, your only cost may be the court filing fee, which is less than $100 in most jurisdictions. Additiona...
File For Cheap Divorce In Oklahoma
Filing for a divorce in Oklahoma is cheap and easy if you do it right.Filing for divorce does not have to involve an attorney. People who have a lot of property, minor children or simply cannot co...
File A Quitclaim Deed In Indiana
File quitclaim deeds with a county recorder in Indiana.When a warranty deed is signed in Indiana, it guarantees the person receiving title that the person giving the property, the grantor, actuall...
File For Divorce In Sacramento
California residents must comply with state residency requirements prior to filing for divorce in the state.When a couple decides to split, it is never an easy choice. Oftentimes, the situation is...
File For An Annulment In Md
Annulling a marriage in Maryland.An annulment is a decision from a trial court that a marriage was not valid in the first place. Courts, including those in Maryland, do not favor granting annulmen...
