What Is Mechanic’s Lien Enforcement?

Contractors, subcontractors, and suppliers rely on timely payments to maintain their business operations when working on a construction project. However, when payment disputes arise, a mechanic’s lien provides a legal tool for these parties to secure compensation for their work or materials. If you are in Maryland and dealing with a construction payment dispute, understanding how mechanic’s lien enforcement works can help protect your rights.

A mechanic’s lien is a legal claim filed against a property by a contractor, subcontractor, or supplier who has not been paid for work performed or materials provided. Essentially, it gives the unpaid party a security interest in the property. The property owner may not sell or refinance the property without first addressing the lien. A mechanic’s lien aims to ensure that those who contribute to improving a property are compensated. If the lienholder is not paid, they can enforce the lien, which may result in the sale of the property to cover the unpaid debt.

Who Can File a Mechanic’s Lien in Maryland?

Several parties involved in a construction project may file a mechanic’s lien in Maryland. This includes general contractors, subcontractors, and material suppliers. However, architects, engineers, and surveyors may also be eligible if their work contributes directly to improving the property. If you are a contractor or supplier in Maryland, you must file your lien within the statutory deadlines and meet other legal requirements. Failure to do so may result in the forfeiture of your right to file a lien.

How a Mechanic’s Lien Enforcement Works?

Mechanic’s lien enforcement begins after the lienholder has properly filed their lien. In Maryland, several key steps are involved in enforcing a lien, including the initial filing, providing notice to the property owner, and initiating legal action if necessary.

• Filing the Lien: The first step in enforcing a mechanic’s lien is filing the lien itself. This must be done within 180 days of the last day you provided labor or materials. The lien should include detailed information about the work performed, the amount owed, and the property being claimed.
• Serving Notice: After filing the lien, the lienholder must notify the property owner of the lien. This is typically done by sending a copy of the lien to the property owner via certified mail. Failure to provide notice can invalidate the lien.
• Initiating Legal Action: If the property owner does not pay the debt within a reasonable time, the lienholder may initiate a lawsuit to enforce the lien. In Maryland, you must file the lawsuit within one year of filing the lien. If the lienholder wins the lawsuit, the court may order the sale of the property to satisfy the unpaid debt.

If the lienholder does not file a lawsuit within the one-year timeframe, the lien becomes void. This means that the lienholder will no longer have a legal claim against the property, and the property owner will not be obligated to pay the debt. Therefore, it is critical for lienholders to act promptly to protect their rights.

Common Challenges in Mechanic’s Lien Enforcement

Mechanic’s lien enforcement can be a complex and time-sensitive process. Some common challenges lienholders may face include:

• Missing Deadlines: Maryland’s filing deadlines and notice requirements are strict. Missing these deadlines can result in the forfeiture of your lien rights.
• Disputes Over Payment: Property owners may dispute the amount owed or claim that the work was incomplete or substandard. Resolving these disputes may require legal intervention.
• Bankruptcy of the Property Owner: If the property owner files for bankruptcy, enforcing a mechanic’s lien becomes more difficult. In some cases, bankruptcy courts may discharge the debt, leaving the lienholder with limited options for recovery.

The Annapolis Real Estate Lawyers at Oliveri & Larsen Help You Protect Your Assets

At Oliveri & Larsen, we understand how important it is for contractors, subcontractors, and suppliers to receive timely payments for their work. Our team has extensive experience handling mechanic’s lien enforcement in Maryland. Speak with the Annapolis real estate lawyers today. Contact us online or at 410-295-3000 to schedule your consultation. Located in Annapolis, Maryland, we serve clients in Ocean City, Anne Arundel County, Baltimore County, Baltimore City, Calvert County, Harford County, Howard County, Queen Anne’s County, St. Mary’s County, Worcester County, Kent County, and the upper and lower Eastern Shores of Maryland.