5 Ways You Can Lose Your Lien Rights in Alabama
A mechanic’s lien, or materialman’s lien, is a lien against a property that has been improved upon or remodeled. A contractor or subcontractor may file a mechanic’s lien if the homeowner or property owner refuses to pay for all or part of the improvements. You may file a property owner either for his or her failure to pay you directly, or for the general contractor or subcontractor’s failure to pay you for labor or products provided. Mechanic’s liens serve as a great form of protection for individuals who are paid once a job is complete and after they have already dedicated a significant amount of time and money into a project.
In Alabama, there are only two requirements a person must meet to file a mechanic’s lien:
- The party filing the lien must have made some improvement to the property, which may have been in the form of providing labor, materials, engineering services, or any other type of labor that added value to the property in question; and
- The filing party must either be the original contractor, a subcontractor, or someone who provided materials to the contractor or subcontractor.
So long as those two requirements are met, a person has a right to file a mechanic’s lien. That said, just because those two requirements exist does not necessarily mean that a person will be successful in his or her lien endeavors.
If you want to file a mechanic’s lien in Alabama, there are certain steps you absolutely must take, such as hiring a creditor’s rights attorney, and steps you should avoid, which are outlined in this post.
5 Ways You Can Ruin Your Chances at Recovery
A mechanic’s lien can be a useful tool, but only when you follow standard protocol for recovery. Here are five ways in which you can deter from standard protocol and forfeit your chances of reclaiming what is rightfully yours:
- Operating Without a Proper License
Alabama requires all contractors, subcontractors, equipment rental companies, laborers, material suppliers, and professionals to be properly licensed in order to even do work within the state. Any person or entity operating without the correct credentials in place automatically forfeits his, her, or its rights to a lien. If you are currently unlicensed, contact a Mobile business attorney about what you need to do to obtain appropriate status.
- Missing Deadlines
General contractors must file notice of a lien within six months of the last day of work in order to be eligible for recovery. Laborers only have 30 days from the last day of work, and all other claimants have four months. If you miss those deadlines, you forfeit your right to recovery.
- Failing to Serve Notice to the Owner
Alabama does not require original contractors to file a notice of a lien to the property owner, but all other interested parties—including subcontractors, materialmen, engineers, etc.—must file a notice before they are able to file a lien. That said, material providers have the option to file a Notice to Owner Prior to Performance, which allows them to obtain the same lien rights as the original contractor but prior to furnishing any materials.
- Claiming the Wrong Amount
Claiming the wrong amount on a lien is considered fraud in the state of Alabama, which can range from a Class A misdemeanor to a Class B felony. If it is discovered that you filed for more than what you are actually owed, you may be the one who loses, even if the property owner truly does owe you money.
- Failing to Submit a Sworn Statement of Account
In some cases, a property owner may truly believe that he or she does not owe a service or material provider any money. For this instance, Alabama law allows property owners to respond to a lien with a request for a Sworn Statement of Account, which is a document provided by the service or material provider that details the labor and/or materials furnished along with the amounts due. If the delinquent property requests that you submit a Sworn State of Account and you fail to do so within the requisite time limit, you may jeopardize your chances at recovery.
Do Not Take a Chance and Work With a Skilled Creditor’s Rights Attorney
As you can see, there are several things that you can do or not do to jeopardize your lien rights. Avoid making mistakes entirely and work with an experienced Alabama lawyer who is familiar with the law and the steps that need to be taken to exercise those rights. Contact Cloud Willis & Ellis to schedule your consultation today.