Filing a lien when you have worked on property

You’re a contractor, and you’ve done work on someone’s property. They won’t pay you. You wonder: What can you do?

One way of enforcing a debt owed to you, for work on property, is to file a “mechanic’s lien” or “materialmen’s lien.”

What is a lien?

When I was in college and law school, it was difficult for me to understand what a lien was. A lien is a right that a creditor has against someone else’s property. If you have a lien on property, the owner of the property generally can’t sell the property until the debt is paid off. Also, if you have a lien, you may be able to file a foreclosure lawsuit in court, and take possession of the property or sell the property to pay off the debt.

To read more about the definition of “lien”, click on the legal dictionary at Cornell Law School here.

To read more about foreclosure lawsuits, click on my previous blog post here.

When can you file a lien?

Oklahoma state law says you may file a lien against any property if you have a contract with a landowner to:

·         perform work on the property

·         provide material for the land

·         rent equipment to be used on the land to erect, change or fix any building, or any improvement or structure on the building

·         put fixtures, machinery, or attachments on a building, or on the structure or improvements of a building

·         plant a tree, vine, plant or hedge on the land

·         build, change, fix or provide work or material or lease or rent equipment used on the land for buildings, or

·         change or fix any fence or footwalk in or upon the land, or on any sidewalk in any street abutting the land

How to File a Lien

To file a lien, go to the county clerk’s office in the county where the property is located. Give the county clerk a lien statement. The statement must include:

·         The amount claimed

·         The items for which the charge was incurred

·         The owner’s name

·         Your name

·         A legal description of the property subject to the lien. To read more about legal descriptions, click here.

The county clerk will then have to mail notice of the lien to the property owner, via certified mail. You will have to give the county clerk the owner’s address, and you’ll have to pay the fee to send the certified mail. There may also be a filing fee for the lien.

You must file the lien within four months after the material was used on the land, or within four months after you performed the work.

Before you file the lien, you may also have to send the property owner a pre-lien notice

On most liens, you have to send the owner a pre-lien notice before you file a lien. This  notice must contain:

·         A statement that the notice is a pre-lien notice

·         Your name, address, and telephone number

·         The date you supplied the materials and/or labor

·         A description of the materials and/or labor you supplied

·         The name and last-known address of the person who asked you to provide the materials or labor

·         The address, legal description, or location of the property

·         The amount owed

·         Your signature.

You may deliver the notice

·         By hand delivery, if the recipient signs a delivery confirmation receipt

·         By certified mail, return receipt requested

·         Electronically, if the delivery conforms to the Uniform Electronic Transactions Act.

You don’t need to file the pre-lien notice with the county clerk. However, you do need to file, with the county clerk, a notarized affidavit saying you complied with the pre-lien notice requirements. If you submit a false affidavit, you can serve up to thirty days in jail, or be fined up to $5,000, or both.

If you don’t send a pre-lien notice before you file the lien, the lien will be invalid and unenforceable.

When must you send the pre-lien notice

The law says that you must send the pre-lien notice “prior to the filing of the lien statement.” One attorney, writing in the Oklahoma Bar Journal, points out that the law doesn’t give any amount of time that must take place between the sending of the pre-lien notice and the filing of the lien. So, theoretically, you could send the pre-lien notice and then file the lien on the same day, as long as you send the pre-lien notice first. However, this attorney also notes that if you do this, it will be hard to prove that you sent the notice first. So it may be best to send the notice at least one day before you file the lien (the postmark will show the date, but not the time, that the notice was sent).

You also must send the pre-lien notice no later than 75 days after the date you last supplied labor or materials to the owner.

When you don’t need a pre-lien notice

You don’t need a pre-lien notice if:

·         Your total claim is for less than $10,000, or

·         Your claim is for services or material for a “residential project.” The law defines a “residential project” as “a single family or multifamily project of four or fewer dwelling units, none of which are occupied by an owner”

Foreclosing on the lien

To foreclose on the lien, you must file a foreclosure suit within one year after you file the lien with the county clerk’s office. If you don’t file a foreclosure suit within one year, the lien will automatically be discharged. (Some property owners, when the county clerk informs them that someone filed a lien against their property, simply don’t do anything, and hope that the creditor won’t file a foreclosure action.)

How the debtor may cure the lien

The debtor may cure the lien by:

·         Paying you

·         Depositing cash, in the amount of 125% of the value of the lien, with the county clerk, or

·         Posting a corporate surety bond, in the amount of 125% of the value of the lien, with the county clerk

If the debtor deposits cash or posts bond with the county clerk, the county clerk must notify you. If the debtor has posted a corporate surety bond, you have the right to object if you believe that the bond was legally insufficient. If you object, the county clerk must hold a hearing to decide whether the bond was legally sufficient. If the county clerk rules that the bond is legally insufficient, the debtor may appeal the clerk’s ruling to the district judge.

If the debtor deposits cash or posts a bond with the county clerk, and you don’t file a foreclosure action within a year of filing the lien, then the debtor may ask the clerk to return the cash or release the bond. The clerk must then return the cash or release the bond.

Need help with a mechanic’s or materialmen’s lien? Call the Persaud Law Office.

If you have performed work on someone’s property, and you want to know how to enforce your contract, contact the Persaud Law Office. Or perhaps someone has filed a lien against your property, and you want to challenge it. We can help you with that too.

The Persaud Law Office has drafted lien statements and pre-lien notices for a number of clients. We’ve also represented debtors. We’re happy to help you; give us a call.

You may also find helpful a recent article in the Oklahoma Bar Journal. This article provides an excellent introduction to the law of mechanic’s and materialmen’s liens, and discusses many of the legal issues surrounding such liens.