When to Get Your Attorney Involved with Your Mechanic Lien
Contractors and subcontractors can often face potential problems getting paid during the course of their work. Having a mechanic’s lien system in place can help protect against these problems. While the majority of our mechanic lien system can be done within your own company, there are some situations when it's best to get an attorney involved.
When is the Best Time to Involve an Attorney?
As a general rule of thumb, when it’s time to file the lien foreclosure action, it’s time to bring your attorney on board. Filing a foreclosure action on a mechanic lien is the formal process of filing a lawsuit against the property owner in civil court.
Involving your attorney increases your chances of successfully foreclosing on the property. The foreclosure process can be complicated, but a skilled attorney improves your chances of receiving your just compensation.
One significant benefit of having a mechanic lien system in place is that you do most of the fact-gathering work yourself, so you save a large amount in attorney’s fees. Once it’s time to bring in your attorney, the majority of your suit is ready to go.
Other Situations to Consult Your Attorney
Foreclosure actions aren’t the only time your attorney should be brought into the fold. There are a few other situations where involving your attorney earlier may be recommended, such as property title issues and bankruptcy claims. In general, if you experience any complications or unique circumstances with your mechanic lien, it’s best to involve your attorney.
Situation 1: There is a complicated property title
When the title of the property doesn’t match the person who owes you money or the title is complicated for other reasons, getting assistance from your attorney is the best course of action.
Your mechanic lien must be filed against the correct person or entity, otherwise, your foreclosure action will fail. If your title search turns out more complicated than usual, reach out to your attorney for assistance.
Situation 2: The property owner files for bankruptcy
When the property owner files for bankruptcy, it can be challenging to understand where you stand in the pecking order. When the property owner declares bankruptcy and the trustees take over their property to sell and distribute the assets, you’ll undoubtedly be wondering when you’ll get paid.
This is a tricky situation that your attorney can help you navigate. There will still be steps you need to take in order to have your mechanic lien successfully foreclosed, but your attorney is the best resource in this situation.
Situation 3: Issues filing a pre-lien
A pre-lien notice is an important document that you need to file before the actual mechanic lien. It notifies the property owner of your work on the property and your right to compensation. If your contract is not with the owner of a property, then you need to file a pre-lien notice before filing a lien.
If you are unsure whether your contract is with the property owner or someone else, involving your attorney can be valuable. Assuming you take the effort to file a lien but never filed the necessary pre-lien notice, your work will be in vain.
Situation 4: General legal problems that require counsel
While using a mechanic lien system is typically straightforward and smooth, there are certainly exceptions. If you ever run into a situation that feels unfamiliar or complicated, reach out to your attorney. It’s better to have him or her review your work and confirm that you did it correctly than it is to move forward with mistakes.
If you have not yet implemented a mechanic lien system in your construction business, then it’s time to get started. You can reach out to Daffern Law Firm directly for a legal consultation, or use our comprehensive Mechanic Lien Course to create a simple system to use in your own business.
