Filing a Mechanics Lien to Prevent the Sale of the Property
It is bad enough furnishing valuable labor and materials to a project and not being paid. Or a slow pay arrangement in which you only receive a partial amount at the end of the project. But it can get even worse if the owner attempts to sell the property out from under you and get away without paying any sums. This is when a mechanic’s lien can effectively prevent that sale.
Here is an example. You have been called in by the owner of an apartment complex to do extensive drive dry-rot repair to the balconies. You are told this is a fast-track project and has to be done right away. You even have your crew working weekends and holidays. It’s a good job with a good price, so you don’t mind doing the work.
It is a four draw project and you get paid on the first two draws. But then the owner’s representative becomes hard to get ahold of and is bit vague as far as when payment will be made paid. All along, you are pressured to accelerate the work to get it done.
Then near the end everything changes. Suddenly a punch list appears and then another punch list, including many items that were not even in your original contract. But with the assurance of being paid, that work is also done.
Then you notice something interesting. There is a for-sale sign posted. You contact the realtor who indicates that property was in the process of being sold for a couple months. You were never told.
Now you don’t get any return phone calls from the owner. The reason is obvious: they are trying to sell the property out from under you.
This is where the mechanic’s lien comes in handy. When it is recorded, it is picked up by the title company who will not close the escrow unless and until there is a release of lien or you are paid. Now you are suddenly in the driver’s seat.
But remember, in order for this to work, you have to comply with all pre-lien notices and make sure you file your mechanic’s lien on time. If you do, you are now in control of the situation.