A Mechanic's Lien is a claim against real property for work done or materials supplied for the property. Under Maryland's Mechanic's Lien laws, certain individuals or entities are permitted to file claims and/or pursue legal proceedings against the subject property provided that the individual or entity performed work on the property or furnished materials for the property. The Mechanic's Lien is an additional remedy for those entitled to its benefit. The filing of a Mechanic's Lien does not preclude the pursuit of other legal remedies.
Maryland's Mechanic's Lien law, enacted in 1791 to benefit the construction of the District of Columbia, was the first such law enacted in the country. The subject laws have obviously evolved over time through judicial interpretations and statutory revisions. However, the intent and purpose of the law has remained consistent: to encourage construction by assuring payment to contractors, laborers, suppliers of materials and/or others who have conferred a benefit to the property owner.
Today, Maryland's Mechanic's Lien laws present a myriad of complex substantive issues as well as procedural mandates. Creditors wishing to take advantage of the many benefits of a mechanic's lien must ensure that their collection system is fully compliant with all legal mandates. Quite often creditors assume they have secured a valid claim under the mechanic's lien laws only to learn through their counsel or a court that the notices were not provided timely, served improperly or were substantively deficient under the strict mandates of the law. The creditor is then faced with pursuing alternative legal remedies which far too often involve more lengthy and costly legal proceedings with a decreased expectation of positive results.
If used properly, however, a claim for a Mechanic's Lien provides a significant remedy to subcontractors, contractors and suppliers that are entitled to be compensated for their services and/or materials. A creditor with the ability and desire to pursue a valid claim against the subject real property under the Mechanic's Lien laws is not obligated to directly pursue the party that has defaulted upon its payment obligations. The property becomes the focus, not the delinquent debtor who often has no present ability to make the payment at issue. A properly filed Mechanic's Lien may preclude the property from being sold, transferred or mortgaged without first satisfying the mechanic's lien. This is one efficient way in which to ensure that payment will be made. Additional remedies allow the lien claimant to pursue a forced sale of the property.
A key procedural component to a properly filed Mechanic's Lien is providing timely notice of the claim. In Maryland, you must provide notice to the property owner within one hundred twenty (120) days of the date that the work was performed on the property or the materials were furnished to the property. Once you have provided timely notice, and payment remains outstanding, you must file a timely Petition in the Circuit Court for the county in which the property is located. The Petition must be filed with the appropriate court within one hundred eighty (180) days of the date that the work was performed and/or materials furnished. Compliance with these statutory deadlines is imperative.
It is likewise imperative that the Notice of Lien and Petition contain the requisite substantive information pertinent to the subject claim and that the property owner be provided with proper notice of said Notice and/or Petition. Without the requisite information and proper service upon the property owner, an otherwise valid claim may fail. There are additional procedural and substantive issues that must also be addressed when pursuing a Mechanic's Lien. Please look for articles on all of these issues in subsequent editions on our website