What's a lien and why are you filing?

What is a lien? A lien is a claim for materials or services which attaches to the real property being improved. The document initially filed is called a "claim of lien" and acts as notice to the general contractor or owner that you have a claim for your improvement to the property. Recovering funds through the filing of a claim of lien is actually a three step process:

1) filing a claim of lien and providing notice of that to the property owner;

2) filing a lawsuit against the party with whom you contracted and recovering on that claim; and

3) foreclosure of the lien which involves filing a lawsuit against the owner of the property to recover the amount of your judgment against the contracting party from step two, above (lien perfection).

Why are you filing? While the obvious answer is to recover your money, the technical reason you are filing the claim of lien is to attach your money claim to the property which you improved with your labor or materials in the event the person or company you contracted with for the services at issue can’t pay you.

The ultimate objective is to recover your money. The quicker you do so, the less legal fees and time you spend dealing with issues unrelated to your primary business: construction. Filing a claim of lien can effect title to the property in question and can affect the owner’s ability to sell the property.  Burdening a property with a properly filed and valid lien can motivate the property owner to satisfy the claim and/or put leverage on the contracting party to resolve the claim. Often times, simply filing the claim of lien will provide the incentive needed by the contracting party or owner to pay your claim.