A mechanic’s lien is somewhat of a misnomer. It has nothing to do with auto mechanics. Rather, it’s a type of lien that general contractors, subcontractors and construction materials suppliers are allowed to record against a homeowner’s property to secure the payment of services, labor or materials. A mechanic’s lien creates a cloud on the title of real estate where their work, material, or services were provided.
Unlike most other liens, a mechanic’s lien does not require court approval. That’s why it is a very powerful tool for construction professionals to ensure that they are paid for their work, labor and supplies.
Mechanic’s Lien Requirements
The critical requirement to obtain a mechanic’s lien is that the contractor must have a written contract with the homeowner. Without a written contract in place, there is no entitlement to a mechanic’s lien.
The process of filing and recording a mechanic’s lien is very strict, and should be done under the guidance of an attorney. There are several notices and documents that must be recorded under strict time deadlines. Any misstep will result in a dissolution of the lien.
Who can obtain a Mechanic’s Lien In Massachusetts?
The mechanic’s lien law has been in existence in Massachusetts since the 1800’s, but lawmakers substantially overhauled it in 1997. The following types of construction professionals can file a mechanic’s lien:
- general contractors
- subcontractors and sub-subcontractors
- machine rental companies
- materials suppliers
- lumber companies
- demolition contractors
- utility contractors
- site excavators
- civil engineers and architects
- construction project managers.
How Does A Homeowner Remove A Mechanic’s Lien?
If the homeowner believes that the mechanic’s lien is improper, the mechanic’s lien law provides a summary procedure in the Superior Court or District Court to discharge a lien. Consult an experienced attorney in this type of situation.
If the parties can come to an agreement on what’s owed, the contractor can voluntarily dissolve the mechanic’s lien.
Owners can also “bond off” mechanic’s lien by procuring a lien bond from a surety company.
I Paid My Contractor, But His Subcontractor Just Filed A Mechanic’s Lien, What Do I Do?
Although subcontractors do not have a direct contract with an owner, they are nonetheless entitled to a mechanic’s lien for unpaid services/supplies. It doesn’t matter if the general contractor failed to pay his subcontractor. A subcontractor who attempts to file a mechanic’s lien, however, is subject to even stricter requirements under the new Massachusetts mechanic’s lien law, so consult an attorney to verify whether they have followed all the rules. Also, a subcontractor/supplier’s right to recovery is limited to the amount due under the prime contract at the time of the lien. Thus, the longer a subcontractor waits to assert a mechanic’s lien, the less money may be available to satisfy its lien. This can be overcome by serving a written notice of identification, which is a form set forth in the statute letting the owner and general contractor know the sub is on the job.
I always put indemnification/liability shifting provisions in construction contracts which make the general contractor responsible for any claims or liens asserted by any subcontractor. But that doesn’t necessarily prevent a subcontractor from filing a mechanic’s lien. If the lien is valid, you may have to bite the bullet and pay (twice) the subcontractor to release the lien. There is also a lien waiver mechanism where general contractors and subcontractors release lien rights upon progress payments, but they are infrequently used in residential projects.
Consult An Attorney
The Massachusetts mechanic’s lien process is extremely complicated, especially for the average homeowner and even for the experienced construction professional. While it provides a powerful tool for persons seeking payment for their securities in improving real estate, one seeking to enforce the mechanic’s lien must strictly comply with the statute requirements. The wise choice is to consult an experienced real estate attorney with respect to mechanic’s lien issues.