Working on construction projects is rewarding work – whether you are a craftsman, a materials supplier, an equipment supplier, or laborer. Your job involves creating something beautiful and functional from a piece of land and your hands, such as a home, a municipal building, or an office.

But sometimes, as part of a project, it’s important to take action to ensure that you’ll be paid for your services, time, or materials. The law offers a remedy for these times – a mechanics lien.

Sometimes called a laborer’s lien or construction lien, a mechanics lien is an additional tool to facilitate payment for your hard work on a construction project.

Filing a construction lien can involve a great deal of detail and follow through. There are
differences in how to file from state to state. We’ve outlined here the five most important things
that you must do when filing a mechanics lien, no matter what state the project resides.

Resources and Forms

• Mechanic’s Lien form
• Release of Mechanics’ Lien form
• Partial Release of Mechanics’ Lien form

State Based Instructions

• California
• Colorado
• Nevada
• Texas

Do Your Research

You need to understand, based on where the project is located, if you can file a lien. The
project, and any associated liens, are subject to the laws of the state where the construction is
located. If your company is in Arizona, but the project is in California, you’ll need to understand
the lien laws for California.

There are three factors that determine if you can record a lien – your relationship to the project;
if you’re required to give notice; and the timeline for recording the lien.

The part you play in the development of a construction project can affect your ability to record a
lien. For instance, in most states, a material supplier can file a lien, but if you supply materials to
another supplier on the project, you have no remedy directly against the property.

As you research your rights, pay special attention to requirements and deadlines. In some areas
you are required to give notice to the property owners of your intent to file a lien, prior to
recording the lien.

Create the Lien

How to prepare the lien also requires an accurate and current lien form. Once prepared, liens
are filed with the recorder or clerk in the county or other jurisdiction where the property is
located.

It is not uncommon for liens to be rejected based on the submission requirements of the
recorder. Save yourself time and understand what the recorder requires before you even start.

Most liens must include the legal property description, not just the street address. But in some
areas, lien requirements include formatting the document itself, such as fonts, font sizes, and
page margins.

Record the Lien

A lien must be recorded in the county or other jurisdiction where the construction project is
located. To expedite matters, you can hire a courier to deliver it to the recording office. Many
counties also now allow you to file electronically.

You must record the lien within the timeframe stipulated by the state’s laws. If you mail or
deliver the lien to be recorded, make sure that the recorder has ample time to record the lien or
you will miss your lien deadline.

Notification of Lien

The party or parties subject to the lien often must be served or notified that a lien has been
recorded. Again, each state is different, so make sure you know who needs to be notified and
the timeframe they are required to be notified. In some states, you need to notify all parties at the
time the lien is recorded. Others may allow you a short grace period.

Be sure to notify all of the appropriate parties, as well. For some areas that means the property
owner or owners, while others require that the contractor and lender be notified as well.

Complete the Process (or Extend!)

Liens can expire. If your lien expiration deadline is approaching, either extend the lien – which is
only allowed in some states – or you must file suit to enforce the lien.

In some states, if you have been paid or your lien has expired, you may be required to release
the lien or be subject to financial penalties. Most states will have a “release of lien’ that is
recorded.

Mechanics Liens can be a valuable tool in your collection process. Understand your rights and lien requirements. You may find that liens, and even the Intent to File a Lien, are an effective
avenue to maintain a profitable project.