Are you ready to finally build the new home you always dreamed of? Perhaps you are considering adding on to your existing home. Construction projects are expensive. The last thing you want to discover after the project is over is that an unsatisfied construction lien encumbers your property.
When a prime contractor performs work on your project, the contractor acquires a lien on the improvements. However, in many cases, the prime contractor contracts with subcontractors to assist with certain aspects of the project. These subcontractors will also have lien rights on your property to the extent of any of their improvements.
Being aware of these lien rights is critically important. In many cases, the prime contractor pays subcontractors directly with your construction funds, often in draws taken throughout the project. Should the subcontractors go unpaid, they will have the right to perfect their lien rights on your property. An unsatisfied lien is a burden on your property, affecting your ability to sell it and putting it in jeopardy of foreclosure.
For these reasons, you should demand lien waivers from all contractors at the close of a project. With certain exceptions, where a prime contractor retains subcontractors to work on your project, you should receive notice of the contractors’ lien rights. You should receive notice of the prime contractor’s lien rights either in the written contract with the contractor or within 10 days of the start of any work on the project. Subcontractors must give you notice of their lien rights within 60 days of the start of any work they perform on the project.
If a subcontractor has not been paid, the contractor must first provide you with written notice of the contractor’s intention to file a lien. If the lien is not satisfied within 30 days, the contractor may file a lien on your property. There are time limitations regarding when the contractor must file the lien based on the last work performed on the project. If you discover the unfortunate news that a contractor has filed a lien on your property, you should consult with an attorney to determine if the lien was properly and timely perfected. Please contact one of our experienced attorneys to guide you through this process.