A mechanics lien is an incredibly helpful tool for contractors and other similar workers to ensure that their services get paid for. If you work in an industry where mechanics liens are common or typically available, getting one and executing on it might be the best way to collect outstanding debts and accounts receivable.
Our lawyers can help you file for and secure a mechanics lien to protect your interest in the property you repaired or improved, and if the customer/client does not pay, we can try to execute on that lien. Our lawyers can also explain to you how a mechanics lien works, what priority order it takes, and the answers to other questions you might have about using a mechanics lien.
Call our mechanics lien attorneys at Howe & Associates today at (678) 680-6983 for a review of your needs.
What is a Mechanics Lien?
Before we go into how you can get a mechanics lien and how you can collect on that lien, it is important to understand exactly what a mechanics lien is.
First and foremost, a lien is a property interest in a piece of property that allows you to collect on a debt if the property owner does not pay you. When someone has a lien on their property, it means that they cannot sell it without paying off the debt from the proceeds. A proper lien may even allow the lienholder to seize the property and sell it to satisfy the debt that is owed to them.
With a mechanics lien, someone who does work on an item or real property (e.g., a house) can take out a lien on the property they worked on to ensure payment. This way, if the owner of the property does not pay them for the work, they can enforce the lien – which usually means selling off the property to cover the debt.
These are called “mechanics” or “mechanic’s” liens after the job of “mechanic,” which actually used to refer to builders before cars were invented and we associated the term more with auto mechanics. Even though this specific job title is in the name, mechanics liens are available in many different industries to help workers and businesses guarantee that they can get paid.
Industries and Businesses that Can Use Mechanics Liens in Columbus, GA
In the simplest instance of a mechanics lien – which is actually a separate type of lien called a “possessory lien” – the property owner will drop off the items in question with the business doing work on them. Think, for example, of an auto shop where the car’s owner will actually leave the car at the shop and give the shop the key. If the car’s owner returns and refuses to pay, the shop is not going to give the car back, giving them leverage over the car’s owner. In many cases, you can act on this lien by selling or keeping the vehicle, but there are often specific rules that need to be followed regarding recording liens on a title or actually retitling the vehicle over the owner’s objections.
More to the point of a true mechanic’s lien, the property in question will not usually be something you can take and move to sell it. Instead, the property will be a house, other building, or a piece of land, and the work in question will be construction work, renovations, building, or other improvements or services to the real estate.
The law in Georgia also supposes that the property in question could be something like a factory or railroad, allowing other architects, contractors, foresters, land surveyors, and machinists to get a mechanics lien as well. More specific examples of jobs and businesses that can seek mechanics liens can be found in O.C.G.A. § 44-14-361.
How to Create a Mechanics Lien in Columbus, GA
For most of the jobs listed in § 44-14-361, you can secure your lien by following certain procedures to declare your interest, state the amount owed, and record the lien. These rules are found primarily under O.C.G.A. § 44-14-361.1. Liens are usually filed with the Clerk of Courts in the county containing the property, and the lien must be filed within 90 days of the end of the work.
You also have to send a copy of the lien and notice to the property owner following certain rules for what type of mail to use and how to give notice.
If you do not follow these rules – and follow them within the time limits – you might not be able to get a mechanics lien. Because of this, it is important to talk to our mechanics lien lawyers about how to set up a lien when you are starting the work in question. It is never too early to reach out to us and get an understanding of the process so that our attorneys can help you get together the kinds of paperwork you will need to file for every subsequent lien your business takes on.
Collecting on a Mechanics Lien in Columbus, GA
While filing for a mechanics lien might involve some simple paperwork, collecting on a mechanics lien is more challenging. Once the lien is properly recorded, it should appear in any title search, making it hard for the property owner to sell their real estate without having the prospective buyer see the lien on the property. If they do try to sell within the timeframe you have to collect on the lien, then you should be able to claw back your claimed amount from their proceeds.
If the owner has no plans to sell, then your mechanics lien might entitle you to seize the property and auction it off to collect on the debt they owe you. This is obviously a more convoluted process and often puts your lien against other liens help by other creditors (e.g., a mortgage on a house). Usually, you need to file to collect on your mechanics lien within a year of obtaining it, meaning you should contact our law firm and act quickly to avoid losing any right to collect.
Call Our Mechanics Lien Lawyers in Columbus, GA Today
To speak with our mechanics lien lawyers about your case, call Howe & Associates at (678) 680-6983 today.