Mechanic's Liens: What You Don't Know Can Hurt!

The mechanic’s lien remedy is a powerful tool that allows a general contractor, subcontractor or material supplier recover for the labor or materials they provide to a job. However, strict adherence to applicable time frames is necessary to allow a recovery. This article details the statutory requirements for a valid mechanic’s lien.

When preparing any mechanic’s lien certain information is needed. The required items are:

1. The owner’s name;
2. The owner’s address as shown on the county tax records;
3. The legal description of the property where the work was performed or materials supplied;
4. The street address of the property where the work was performed or materials supplied;
5. The name and address of the lien claimant; and
6. The amount claimed due. All mechanic’s liens must be notarized and recorded in the office of the county recorder where the project is located. The time frame and certain prerequisites to obtain a mechanic’s lien vary depending upon the type of project and the ownership of the property in question.

The easiest projects to know what needs to be done is on commercial or industrial projects. On these types of projects, no prelien notice is required and the mechanic’s lien must be prepared and recorded within ninety (90) days of the last labor being performed or last materials being supplied.

Complications arise in the context of one and two family dwellings. The time limit for filing a mechanic’s lien is decreased to within sixty (60) days of the last labor being performed or last materials being supplied. Additionally, a pre-lien notice must be supplied to the owner and recorded with the county recorder within sixty (60) days of the first labor being performed or first materials being supplied if the project is new construction and you were hired by someone other than the owner and the property owner will occupy the structure. A pre-lien notice must be supplied to the property owner, but not recorded, within thirty (30) days of the first labor being performed or the first materials being supplied if it is a remodeling job and you were hired by someone other than the property owner. Finally, no pre-lien notice is required if the project is original construction and you were hired by the owner, if the project is non-owner occupied or if the project is remodeling and you were hired by the property owner.

Once you have filed a valid mechanic’s lien, you have one year to file a lawsuit to foreclose your mechanic’s lien. If you do not file suit within one year, the mechanic’s lien is released as a matter of law. However, the one year time frame may be shortened if the property owner sends a letter demanding that suit be filed within thirty (30) days. If a lawsuit is not filed within thirty (30) days, then the mechanic’s lien is released as a matter of law.

A properly perfected mechanic’s lien can improve your chances of recovery. Additionally, it can provided a statutory basis to recover your attorney’s fees. However, if the statutory requirements for the mechanic’s lien are not followed, you will lose the benefits provided to you by Indiana law.