Used With Care, Liens Are A Highly Effective Way To Get Paid
By Stan Bachman
Morefield Speicher Bachman, LC
Construction can be one of the most complex and challenging industries in business. There are innumerable variables, affected and compounded by unpredictable events, all of which affect your bottom line. But, if there’s one variable you need to minimize it is “No Pay.” Mechanic’s liens are a very effective tool in your legal toolbox to help you minimize the “No Pay” problem.
There are few remedies more powerful in construction than a mechanic’s lien. A mechanics lien allows you to file in state court a claim against a property, for payment for the services you made upon that property. A mechanic’s lien is leverage because it clouds the title to the property, and title insurance companies, lenders and landlords alike all despise clouds on their property’s title. Title insurance will not insure a title to property encumbered by a lien, and lenders and landlords almost always have anti-lien provisions in their loans and leases that require the borrower and tenant to remove the lien. Then, if the leverage doesn’t result in getting paid, then you can file a lawsuit to foreclose on the lien, and to get paid from the net proceeds of the sale of the property, after all senior encumbrances and liens are satisfied (e.g. recorded mortgages filed before the lien attaches to the property). But, let’s look at what it takes to get to a foreclosure action.
In Kansas, there are specific requirements that must be fulfilled. It’s crucial for you to file your mechanics lien in strict compliance with every procedural requirement, as well as per the case law that has been developed over many years. If the lien does not strictly comply with the statute and case law requirements, it will be found to be “fatally defective,” and of no effect.
Each state can vary widely in their procedural requirements. Don’t assume one state is like another, and always check with a well qualified construction lawyer that regularly practices in the state where the property is located.
Mechanics Liens In Kansas Q&A
- How long do I have to file a lien?
— Contractors have four months from the last day that labor and/or materials were provided. Subcontractors have three months. If timely filed, an extension is available extending the deadlines to five months from the last day worked. The extensions must be filed within four months from the last day worked for a prime/general contractor, and within three months from the last day worked for subcontractor.
- How long is the lien effective?
— You have one year to take foreclosure action from filing. If an action is not filed within that year, the lien becomes ineffective and unenforceable as a matter of law.
- Does Kansas require a notice before commencing work, and after its complete?
- Does Kansas require, or does it provide for notice to property owners?
— Only subcontractors who perform work on residential property occupied by the owner must provide the property owner a form warning of a possible lien. Otherwise, there are no notice requirements before a lien can be filed.
As stated above, but worthy of repeating here, there are strict requirements to comply with Kansas lien laws, and there’s a lot at stake. Kansas courts strictly interpret and apply the lien statutes, and it is an area of law where a novice can easily error and file a defective, unenforceable lien. Your specific situation should be reviewed by a qualified construction attorney before your lien is filed. After all, you deserve to be paid.
Please contact me with any questions. I look forward to serving you.