Why You Should Be Wary of DIY Mechanics Lien Processes

Mechanics Lien Do It Yourself

A Google search for “mechanic lien forms” returns a lot of results, many of which are companies selling do-it-yourself forms. These forms are generally provided in a pdf or word format. They can be filled in by the buyer, saved, and re-used whenever a notice or lien is sent and/or filed.

Many who go the do-it-yourself (DIY) route, however, might not understand the complexities of preparing a lien, or pre-lien notices. Preparing these documents is time-consuming and requires strict adherence to specific procedures and requirements. Some examples of potential difficulties are discussed below. Small mistakes can cost you big.

Lien laws throughout the country require that the property subject to the lien be clearly identified. Usually, this means including more than just a municipal address. Nearly always a lien must include a legal property description.

A legal property description is:

a written statement recognized by law as to the definite location of a tract of land by reference to a survey, recorded map or adjoining property.”                   (from: Glossaries of BLM Surveying And Mapping Terms, Second Edition, 1980.)

Identifying a legal property description requires research, which in turn requires time and at least some specialized knowledge. In fact, researching property descriptions was such a burden for zlien, we built a computer algorithm to speed facilitate and speed up the process for us. Learning how to research legal property descriptions (or hiring someone who knows how to do so) is critical to preparing a mechanics lien, and therefore is critical to the validity of the lien itself.

Proper Filing and Service

The many requirements associated with liens don’t only have to do with the content of the document. There are also strict rules for where the document must be filed, to whom the document must be served, and by what method.

Assuming a document has been completed properly, the next step is getting it filed and/or delivered to the right people, in the correct  way.

Is Filing Required? In What Office?

While mechanics liens nearly universally require filing with a government office, most notices can be sent via mail (a less formal process). Still, some notices, under some circumstances, do require filing. The location in which these documents must be filed varies by state. Normally, these type of documents are filed with the county recorder, or the Clerk of Court for the county in which the project occurred.

Who Must Be Served?

The filing of a lien (or notice) is not usually the end of the process. Most states require that the lien be served upon specific interested parties, including the property owner, the lender, and the prime contractor. Service can sometimes be through the mail, but other times requires delivery by a courier or sheriff. Knowing which service is required and how it must be done is critical to correctly filing the lien.

How Must a Pre-Lien Notice Be Sent?

Most states require some sort of pre-lien notice to be sent prior to filing a lien. Almost always, the state also mandates a specific way in which the notice must be sent–usually, through certified mail or certified mail with return receipt requested.

But there are always exceptions. Sometimes, the notice must be sent via restricted delivery, sometimes through registered mail, or sometimes by common courier (such as FedEx) or hand-courier.

Proof of Delivery?

Once the notice has been sent, specific proof of the sending and/or receipt may be required. The type of proof needed varies. A return receipt green card (or electronic green card) may suffice, or an affidavit of delivery or some other proof may be required.

The Littlest Mistakes Can Invalidate a Lien

United States lien laws are old–over 200 years old–and time has shown that courts will often invalidate a lien or pre-lien notice due to the smallest of defects in their content, filing, timing, or service. Even using the wrong margin size on a document, or placing addresses on the wrong side of a page, can result in a rejected lien.

The cost of these seemingly insignificant mistakes is often large. You may be forfeiting the ability to secure an entire invoice. For some businesses, that’s millions of dollars on the line.

Since there are so many intricacies involved in the filing or delivery of lien and notice documents, it can be a costly mistake to buy a simple do-it-yourself form and try to maneuver through these mazes of requirements.

Technology Can Help

Luckily for the potential lien claimant, software platforms can remove the difficulties from the process of sending, filing, and serving construction notices and mechanics liens. Here are some of the things computers can do (and are doing) to help:

  • Automatically calculate lien, pre-lien notice, and bond claim deadlines for any project
  • Determine to whom, and how, a document must be sent/filed
  • Store templates for the hundreds documents required throughout the country
  • Fill in the required templates for any project
  • Make recommendations about when to send documents

Learn more about how smart web platforms can optimize your process of sending lien documents, provide you with more control, and empower you to make strategic decisions regarding your security rights. Request a demo of the zlien platform below.