What Happens When a Construction Lien is Recorded?

A construction lien is like a mortgage lien. When you sign a mortgage, you understand that, if the loan is not paid, the bank will foreclose the mortgage and take the property. A construction lien works the same way. In other words, you either pay the lien amount or the person filing the lien (called the “lienor”) will, generally speaking, file a lawsuit to foreclose the lien against your property. 

The process starts with the recording of the claim of lien. A claim of lien is a sworn statement by the person filing it that:

  • Certain labor, services or materials were provided
  • The name of the person claiming the lien and the person with whom they contracted
  • The date when the labor, services or materials were first furnished
  • The date when the labor, services or materials were last furnished
  • When the person filing the lien served a notice to owner (if applicable)
  • The amount claimed to be owed

There are strict deadlines for recording a claim of lien. Generally speaking, the lien must be recorded within 90 days of the date the person recording the lien last furnished labor, services or materials at the property. If the lien is filed late, it is invalid. Nevertheless, even if recorded late, a lien cannot be ignored. The lien remains a cloud upon title and will prevent the sale of the property (or a refinance) until the lien is released or a judge enters an order removing the lien.

There are tools available to deal with a construction lien once it has been recorded. As a board certified construction law attorney, I have been using these tools for many years. If you need assistance dealing with a construction lien, please contact me directly at reese.henderson@gray-robinson.com or call me at (904) 632-8459.

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