Mechanics Lien Litigation
What is a mechanics lien?
Minnesota law allows construction professionals such as contractors, subcontractors, and material suppliers to place a lien, or legal claim, against any property on which they are working or supplying materials. If the property owner fails to pay for services or materials, the contractor, subcontractor, or material supplier can go to court and attempt to take possession of the property.
Mechanics liens in Minnesota
Mechanics liens are a complex area of law that varies by state. In general, Minnesota law mandates the following:
- A contractor must be licensed in order to file a mechanics lien
- The contractor must provide the property owner with notice of intent to file a lien if the contractor is not paid
- A statement of lien must be filed with the county recorder within 120 days of the completion of work. A copy of the statement must be delivered personally or via certified mail to the property owner or his agent
- Lien holders interested in foreclosing on property must begin the foreclosure process within one year from the date when the last labor, skill, or material was provided
What property owners should know about mechanics liens
If a lien holder decides to enforce a lien, they must file a civil complaint against you in district court. At this point, the lien holder should already have filed a statement of lien with the county recorder and delivered a copy to you either personally or via certified mail. Any other lien holders automatically become defendants with you, the property holder. Each of you will receive a summons which should include the following:
- Amount of the lien
- Description of the property
- Description of the improvements made by the lien holder
Each defendant must file their answer to the complaint with the court within 20 days of being served with the summons.
If you believe the lien holder filed suit without cause, you can counter-file to have the lien removed from your property title. An experienced mechanics lien attorney can assist you in determining the appropriate course of action.
What construction professionals should know about mechanics liens
As a construction professional, you may encounter challenges collecting payment for work you have performed. Mechanics liens help ensure that you are paid for the work and materials you provide on a construction project. If you decide to enforce a lien, you must act within the prescribed guidelines and deadlines or the lien may be unenforceable.
In addition, the lien holder bringing suit must file a notice of lis pendens (litigation pending) with the county recorder. The lis pendens must be filed within one year after the lien holder provided the last item described in the lien holder's lien statement. The notice is then attached to the property title to inform potential buyers of the lien on the property.
The lis pendens does not extend the one-year deadline for filing the complaint. If you do not file the lis pendens within the one-year deadline, the lien cannot be enforced against a buyer or mortgage holder who was unaware of the lien. Working with an experienced lawyer will ensure that your mechanics lien is properly enforced.
Contact Minenko & Hoff, P.A. today
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