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Mechanic’s Liens: A Tool for Unpaid Contractors

By Daniel G. Kerns.

Trouble getting paid for completed work is a problem too frequently encountered by contractors. Fortunately, Indiana law affords contractors, laborers and materialmen a tool to leverage payment. Mechanic’s liens are a statutory remedy codified at Ind. Code § 32-28-3-1 et seq. available to contractors, laborers and materialmen, who have performed work or furnished materials in the construction or repair of a building, fixture, or other real property, and who have not received payment to which they are entitled.  Mechanic’s liens, when properly filed, have the effect of encumbering the improved real property, and thus securing the unpaid amount with an interest in real property.

However, in order to secure a mechanic’s lien, contractors must ensure they comply with all of the statutory requirements, including, without limitation, filing a Notice of Intention to Hold Mechanic’s Lien that is sworn under oath and includes the amount claimed and legal description of the liened property, among other requirements.  Additionally, the mechanic’s lien must be timely filed. For most commercial construction contracts, the statute generally requires a claimant to file a mechanic’s lien within ninety (90) days of the date when the last work is performed by the claimant. However, for work performed on a Class 2 structure (for example, a single or double dwelling townhouse or outbuilding such as a garage or pool), the deadline is sixty (60) days. For work performed on residential projects, other requirements exist, including, without limitation providing the owner with certain notices after the first day of work.

While a mechanic’s lien can be a powerful tool for obtaining payment, each statutory requirement must be met in order to obtain a valid lien. Otherwise, a Court may find the notice of intention to hold mechanic’s lien invalid, which not only takes away the claimant’s leverage for payment, but also may expose the claimant to liability.

Contractors seeking a mechanic’s lien should take the time to ensure each requirement within Ind. Code § 32-28-3-1 et seq. is met, and may benefit from consulting with an attorney to ensure they timely obtain a valid lien. DeFur Voran proudly assists its many contractor clients in obtaining mechanic’s lien and obtaining payments due and owing under their construction contracts. Contact us today for a free consultation.

Daniel G. Kerns is an associate with DeFur Voran focusing his practice on Construction Law and Business Law