When a homeowner or building owner requests work to be done on a structure and they hire out said work to contractors and subcontractors, they are legally obligated to pay for all work completed (so long as a proper contract is in place). If the homeowner fails to pay, the contractor can file a mechanic’s lien, which will prevent the owner of the property from being able to sell that property until all debts are paid. For contractors, a mechanics lien is a highly valuable tool, as it assures that the owner of the property will make all required payments for work completed.
At Cloud Willis & Ellis, our skilled Birmingham business litigation attorneys are familiar with the lien process and have helped countless contractors effectively enforce their rights. If you are having trouble collecting payment from a property owner, our lawyers will ensure that you comply with all Alabama laws relating to mechanic’s liens so that you can better preserve and apply your mechanic’s lien rights.
4 Things You May Not Know About Mechanic’s Liens
There Are Two Types of Liens in Alabama
Depending on your role in the job, you have the option of filing either an Unpaid Balance Lien or a Full Price Lien. An Unpaid Balance Lien allows subcontractors to recover the remaining balance for work provided up to the date that the lien was filed. A Full Price Lien lets general contractors and select others who contracted directly with the home or business owner recover the entire amount of money owed to them for all work completed.
Subcontractors Must Give the Property Owner a Preliminary Notice
Unlike most other states, general contractors in Alabama are not required to give a preliminary notice before filing a mechanic’s lien. However, the state does require that all other contractors—such as subcontractors and materials providers—must deliver a Notice of Unpaid Lien before filing an official lien. There is no specific time that a contractor must file a lien; the law only states that a lien can only be filed after a preliminary notice is given.
That said, a materials supplier can achieve the same rights as the original contractor. However, in order to enjoy those rights, they must file a Notice to Owner Prior to Performance, which must be given to the home or business owner before any materials are provided for the job.
You Have a Filing Deadline
Each contractor has a specified time frame in which they can file a lien, which can range between 30 days and six months.
- Original Contractors: Original contractors have six months from the date that the entire debt becomes due to file.
- Laborers: Laborers have 30 days from the last day that labor was provided to file a preliminary notice.
- All Others: Other claimants, such as materials suppliers, have four months from the last day that labor or materials were provided to file.
There is an Enforcement Deadline
Just because you file a lien does not mean that the property owner will never be able to sell their home. According to Alabama law, a contractor has six months to enforce the lien. After that, if not enforcement action has been taken, the lien expires. To protect your rights and to ensure that you do get paid even if the property owner does not try to sell their property within six months, consult with a knowledgeable attorney about what steps you can take to guarantee payment.
Retain the Help of a Birmingham Business Litigation Attorney
If you are interested in learning more about your rights as a contractor and about how you can enforce payments, reach out to the business litigation lawyers at Cloud Willis & Ellis right away. Depending on your role in a project, your time for filing a mechanic’s lien may be limited. Call 205-322-6060 to schedule your consultation today.