A mechanic’s lien can be an effective tool for contractors, subcontractors, and material suppliers seeking to enforce their right to get paid on a job. Under Maine law, anyone that furnishes labor or materials on a project with the owner’s consent will automatically have a lien (which secures payment for the labor or materials) on the real property where the project is located.
In Maine, anyone that establishes such a lien, however, must take certain steps to preserve and enforce that lien. Where a contractor, subcontractor, or supplier furnishes labor or materials without a contract with the owner of the property (e.g. a subcontractor, a supplier to a subcontractor), it must preserve the mechanic’s lien by: (a) filing in the registry of deeds in the county where the property is located a notice of lien describing the property, the name(s) of the owner(s), if known, and the amount due; and (2) providing a copy of the notice to the owner(s) by mail. This must be done with 90 days from the date that the labor or materials were last provided. Failure to timely record and provide the notice to the owners will invalidate the mechanic’s lien.
In addition to recording the lien, the contractor, subcontractor, or supplier must file a lawsuit within 120 days from the date that the labor or materials were last provided. The lawsuit must name the party that owes the money, the property owner, and any other party with an interest in the real property (e.g., other lien holders, mortgagees, etc.). If the lawsuit is successful, the court may order that the property be sold and the proceeds distributed to the lienor(s).
Generally speaking, a properly preserved and enforced mechanic’s lien will take priority over anyone that has knowledge of, or consents to the work. For example, a mechanic’s lien may take priority over a bank’s prior mortgage when the mortgage was obtained in connection with a construction loan.
Contractors, subcontractors and suppliers, however, must be sure meet the deadlines described above. These deadlines are strictly enforced and failure to properly preserve or enforce a mechanic’s lien will result in a loss of that lien. Once a mechanic’s lien is lost, it may not be revived.
Perkins Thompson regularly helps owners, contractors, subcontractors and material suppliers with mechanic’s lien issues. If you would like to speak with the firm about a mechanic’s lien issue, you can send an e-mail to Joe Talbot or call him directly at 207-774-2635.