Mechanic’s liens are an important weapon in the contractor’s battle to get paid for work done on a construction project. By properly filing a mechanic’s lien against the property that was benefited by the project, a contractor can greatly enhance his prospects for getting paid. If the contractor is ultimately not paid for its work, the contractor can file suit to foreclose the mechanic’s lien and have the benefited property sold to pay for the work.
In order to properly utilize the mechanic’s lien, the contractor must be aware of the very specific requirements prescribed by statute, including but not limited to notice and filing deadlines that are both short and unforgiving. The required notice and filing deadlines differ depending upon the type of construction project, depending primarily whether the project is commercial or residential.
As a general rule, a mechanic’s lien is perfected by filing a Sworn Statement and Notice of Intention to File Mechanic’s Lien in duplicate in the office of the County Recorder in the county where the real estate is located. On commercial projects, this notice must be filed no later than the day that is 90 days after the last day work is performed or materials are provided for the project. On some residential construction projects, the time period for filing the Sworn Statement is shortened to 60 days. After the Sworn Statement is filed, the County Recorder is responsible for mailing a copy of the Sworn Statement to the property owner at the address set forth in this Sworn Statement.
On commercial projects, there are no other filing or notice requirements. However, if the contractor is doing work on a project involving an owner-occupied dwelling, and the contractor is not dealing directly with the owner, the contractor must furnish a written Pre-Lien Notice to the property owner in order to preserve its mechanic’s lien rights. If the work is for the remodeling of the owner-occupied dwelling, the Pre-Lien Notice must be furnished to the property owner within 30 days after the day work is first performed. If the work is for new construction of an owner-occupied dwelling, the Pre-Lien Notice must be furnished to the property owner and recorded in the office of the County Recorder within 60 days after the day of first work. Note that the Pre-Lien Notice for remodeling of an owner-occupied dwelling is not required to be recorded with the County Recorder. These Pre-Lien Notices, if required, are conditions precedent to the mechanic’s lien rights of the contractor, and failure to furnish and record (if necessary) the Pre-Lien Notice within the prescribed time frame voids any further attempts to perfect the lien.
This article is limited in its focus to Indiana law. Other states have similar but distinctly different statutory requirements for the attachment and perfection of Mechanic’s Liens, and the appropriate state’s statutes must be consulted.