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Why You Shouldn’t Use Do-It-Yourself Mechanic Lien and Notice Forms
Posted By Scott Wolfe Jr On April 28, 2011 @ 7:30 pm In Construction Finance | 11 Comments
If you Google “mechanic lien forms,” you’ll be swamped with companies selling do-it-yourself mechanic lien and notice forms for prices as low as $10 or $15. After purchasing the form once, you can use it as many times as your company needs. When comparing this nominal fee with the cost of paying a service like Zlien (or a construction attorney) to prepare the document, it may be quite tempting.
Proper preparation of the mechanic lien or preliminary notice form, however, is not as easy as it sounds. This isn’t because it takes a brilliant legal mind (or any legal mind) to understand how to fill in the blanks – that it certainly doesn’t – but because preparing these documents is time-consuming and requires strict adherence to certain procedures.
Let me offer you a few examples:
It’s nearly uniformly required across the country that mechanic liens identify the property being liened with a legal property description. The street address, in other words, is not enough. What is a legal property description? We wrote an entire blog post on this subject, and you can read it here: Identifying Property in a Mechanic’s Lien.
The definition of a legal property description is:
A legal description (also referred to as land description, property description, or land boundary 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.)
To properly prepare that mechanic lien form (and even some preliminary notice forms), you need to research and find the legal property description. Hiring someone experienced in researching legal property locations is critical to properly identifying the property in your lien.
Assuming you have properly filled out the form, the next step is getting the form filed and / or delivered to the right places, in the statutorily required way. Here are some questions you will confront:
Does this document need to be filed? If so, in which county office is it filed?
Most liens require filing, and most notices do not. However, there are exceptions to both. Where you file depends on the state’s requirements, with filings usually going to the county’s mortgage, auditor or recording offices.
Service Required After Filing The Lien?
Once the lien is filed, your task is not over. Most states require that the filed and stamped lien be served upon certain interested parties, including the property owner, the lender, the prime contractor, and/or those other parties up your contracting chain. Service can sometimes be through the mail, but other times require delivery by a courier or sheriff. Knowing what service is required and how it must be done is critical to correctly filing the lien.
How to send the preliminary notice?
Most states require that preliminary notices be sent in a certain way. Most of the time, the notices are to be sent certified mail or certified mail with return receipt requested. But, there are always exceptions. Sometimes, the notice must be sent restricted delivery, sometimes registered mail, or sometimes by common courier (like FedEx) or hand-courier.
Do I Need to Keep Proof of Delivery?
Yes, and the type of proof varies. The return receipt green card may be enough, but you may also need an affidavit of delivery. Check out this blog post on the topic: Strict Proof of Delivery May Be Required For Your Construction Notice.
Unfortunately, since lien laws are very strictly construed, many states will consider a mechanic’s lien or preliminary notice invalid if there is some defect in how it is filled out (i.e. no legal property description) and how it is handled (i.e. filed in the wrong place, or delivered / served incorrectly).
The cost of these mistakes can be significant, and since there are so many moving parts in the filing or delivery of these lien and notice products, it’s a mistake to buy a simple do-it-yourself form and try to maneuver through these mazes of requirements.
Hiring a company like like Zlien (or a construction attorney), who is experienced and familiar with each state’s specific requirements, will reduce the likelihood of error for your company, and make sure your lien and notice rights are protected.
For more posts about this subject, take a look at the Tag “Why Us.”
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