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How can someone avoid a mechanic's lien?

Maryland property owners should know what a mechanic's lien is. A mechanic's lien is a legal claim that a subcontractor or a supplier can make against a property if they have not received payment for their work by the general contractor. Regardless of whether the general contractor has been paid for all of the work done, the claim puts the financial burden on the property owner.

Suppliers and subcontractors must notify the property owner of work they have done on the property within 20 to 30 days after the work has been completed. If the supplier or subcontractor does not receive payment for the work, then they can file a mechanic's lien against the property. The lien will only have an effect for two to six months if no lawsuit is filed during that time.

There are a few strategies a property owner can implement in order to avoid a mechanic's lien. One way is to get a lien waiver, which means that the general contractor must get a lien waiver from all subcontractors and suppliers that the contractor is responsible for paying after the contractor has been paid for their services. Another option is to pay all checks separately, which means that separate checks are written for individual services and are made out to both the general contractor and the subcontractor or supplier who did the work. A third option is to pay the subcontractors and suppliers directly, which means the property owner bypasses the general contractor and takes that amount out of the total paid to the general contractor.

Property owners that are facing mechanic's liens may want to contact an attorney that has experience in real estate law. An attorney could inform the property owner of what legal options may be available.

Source: Findlaw, "Understanding Mechanic's Liens", November 24, 2014

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