Priority battles can sometimes turn into a nightmare for mechanics lienholders. In many cases, a mortgage lender may have priority over a mechanics lien. Why? Most jurisdictions will give priority to the lender if the mortgage was recorded before the work was commenced on the improvement. Since most mortgages arise to purchase property,…Read More
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Mechanics liens are one of the most powerful tools to protect against the risk of nonpayment on construction projects. But, like with all tools, there are certain situations in which the effectiveness of the mechanics lien may be lessened. Since, in many circumstances, mechanics liens only have priority over other subsequent…Read More
We have seen in recent posts that pay if paid clauses are generally disfavored and subject to strict review by courts. While pay if paid clauses are still enforceable in many states, provided the correct specific language is used, the clear trend is toward treating these clauses with greater scrutiny,…Read More
What’s in a name? In the mechanics lien world any tiny…Read More
Suppliers to Suppliers Do Not Have Indiana Mechanics Lien Rights
Contractors, subcontractors, suppliers to prime or sub contractors, laborers, and equipment lessors are all eligible to file an Indiana mechanics lien. Unfortunately, though, as is the case in many states, suppliers to suppliers do not have mechanics lien rights in Indiana.
I recently discussed the preliminary notice requirements as set forth in Indiana lien law. In that post, I mentioned that all parties not in direct contractual relation with the property owner and who provided labor or materials to a single or double family residential project must provide preliminary notice, and, that…Read More
Gaining the benefit of a mechanics lien may, at first glance, seem like a one-step process: simply file a lien after non-payment on a construction project. In many states, however, multiple steps are required to preserve a right to mechanics lien protection. Specifically, in order for a lien to be valid, many…Read More
A recent case out of Indiana, Feitler v. Springfield Enterprises, addressed two interesting issues: whether “no-lien clauses” in construction contracts are valid and whether parties who are prevented from filing mechanics liens due to no lien clauses can still recover under Indiana’s personal liability statute.
What is a No-Lien…
This sounds like it has an obvious answer. Of course, lien law nuances prove otherwise as there are some scenarios when your right to file a mechanics lien could actually expire while you’re still performing work or furnishing materials.
Scenario 1: You Enter Into Two Contracts On One Project
Last week, the…
As Scott and I have mentioned many times on this blog – mechanic’s liens do not last forever. At some point, the lien claimant is required to initiate foreclosure proceedings (or, occasionally other enforcement proceedings) or the lien will expire. Also, as we have noted, the time a lien will…Read More