What You Need To Know About Mechanic’s Liens In Alabama

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What You Need to Know About Mechanic’s Liens in Alabama

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.

Mechanic’s Liens – The Contractor’s Remedy For Non-Payment

Many homeowners will at some point decide to make some renovations to their home. As such, they find a contractor through referrals from friends and colleagues, hire the contractor to perform the renovations, and get started on the project. In a perfect world, all goes smoothly and the renovations are performed to their specifications, to the homeowner’s satisfaction, and on time – so now it’s time to pay the bill. The contractor submits the bill and waits – patiently – as the due date passes. A second notice is subsequently ignored, and requests for payment go unanswered. The work has already been performed and material and labor has been provided – what options does the contractor have to pursue the money owed to him? In this scenario, the contractor has the option to file a mechanic’s lien and have it enforced under Alabama law.

Requirements To File A Mechanic’s Lien

In Alabama, the law states that two requirements must be met in order for a mechanic’s lien to be filed. First, the filing party – the contractor, in our hypothetical scenario – must have made some improvement to the property such as providing materials, labor, engineering services, or any other type of labor that added value to the property against which the lien is issued. The second requirement is that of a specific relationship between the parties; the filing party must be the original contractor or subcontractor or those who supplied materials to those contractors and subcontractors. As long as these two requirements are met, the one of two different types of mechanic’s liens can be filed under Alabama law – a full price lien or an unpaid balance lien. The full price lien is filed when the filing party has a contract with the property owner, and the unpaid balance lien can be filed by a worker who does not have a contractual relationship on his own with the owner of the property.

The Basic Steps

Once the basics are established, the procedure to file a mechanic’s lien involves providing written notice of intent to file the lien, filing a verified lien statement, and filing suit and obtaining a judgment. Taking these in order, the notice requirement entails sending information to the property owner about the amount in question, the work that was performed, and the person or organization that is owed the money. The notice must also include information about the right to attorney’s fees and finance charges that can be assessed. The second step – filing the verified lien statement – must be done either within 30 days from the last work day in the case of individual laborers or within six months in the case of contractors; other filing parties would need to file within four months of the last work day. The statement must be filed in the county where the property is located. The last step, filing the lawsuit, must be done within six months of the final work day on the property.

Do You Need Help Getting Paid For Your Construction Project?

If you have performed contract work for a property owner and are having trouble getting paid for your time and materials, the attorneys at Cloud Willis & Ellis can help you determine whether a mechanic’s lien is the best way to get the money owed to you. Our legal professionals have successfully assisted clients throughout the Birmingham area recover money owed for their work and will work hard to get the same results for you. Contact Cloud Willis & Ellis now and get the results you deserve.

Resource:

alisondb.legislature.state.al.us/alison/codeofalabama/1975/35-11-210.htm

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