Summary of Materialman’s Liens

A materialman’s lien is the same as a mechanic’s lien. A materialsman’s lien may arise when construction companies or subcontractors take part in building, renovating or making repairs to a home. The lien is placed on the building when certain payment has not been received by the individual or company, and the homeowner may not even be aware of these until they attempt to sell the property.

The lien acts as a type of insurance so that the payment eventually will be made. However, many events resulting in a lien (for example, build, renovation, repair, maintenance) could lead to the payment being made twice. The factors involved in these matters are sometimes complicated when there are multiple companies or agencies included in construction and repairs.

In order to ensure that constructions is accomplished without the need for a materialman’s lien, the owner or person having the structure built needs to check with the contractor to require that any payment given is received by subcontractors or any other agency included in the deal. If he or she does not check this, the contracting agency or individual may pocket the money, the subcontractor will not be paid and the owner is then required to give additional funds when the income has already been supplied for the manpower. This is the situation to avoid when possible that constitutes a materialman’s lien.

How the Materialman’s Lien Works

One of the main reasons to avoid these liens is because payment is often provided multiple times because the main contracting company hires a subcontractor and then does not pay the new employees for work that has been paid and completed. This means that the original company is given more funding and does not do the work. The owner or person that hired the agency needs to become more aware of these processes to ensure these actions do not occur. In some cases, the subcontractor may take the owner to the court and sue for payment. Other activity is often suspended until the lien is satisfied.

To avoid these matters, it is important to watch the paperwork, what the construction company does and how these activities may arise. This could mean that there are certain provisions in the documentation that permits the construction company to hire other employees, subcontractors or similar persons. It may be important to hire a lawyer to ensure the contract between the company and the owner does not have any terms that are open for the agency to hire additional persons. It may be possible to ensure conditions are most beneficial to the owner of the building in this manner as well.

Protecting from these Liens

The contractor has the right to ensure payment through placing a lien on the home. If there is no payment provided for services rendered, this lien is legitimate and valid for the work that has been completed. However, many materialman’s liens are placed for double payments. This means that the contracting agency and any other agent working for the owner of the home should attempt to protect the client from these incidents. These items are usually placed on homes that are built new or with a remodel that is intended on residential structures, but a materialman’s lien could be placed on commercial real estate property as well.

Many states only permit registered contractors to enforce the rights of liens on property. This means that not just any company may place these liens on the house in various locations around the country. However, if the original agency did hire a legitimate subcontractor that is registered, this could occur. A disclosure statement is usually provided to the homeowner before the work is finished. However, this is not always the case, and many situations arise where no notice is provided. This means it is important to hire a lawyer to look into the matter.

The Lawyer in a Materialman’s Lien

When a line has been placed on the house because of work that has not been paid, it is vital that a lawyer is hired. It is important that the legal representative look at the contract between the company and the owner of the home before it is finalized to ensure the best possible conditions exist, but he or she may be needed after to help with the materialman’s lien.

Provided by

Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws they may affect a case.

Find a Lawyer