What Is a Lien, and What Happens Next?
Looking at the list of the types of liens in the preceding section, below, we'll examine a Mechanics Lien. This is a legally binding document raised by someone for non-payment of a debt from another individual.
The mechanic's lien is raised and recorded in the County Recorder’s Office by an unpaid tradesman or contractor and can cause several serious problems to the debtor.
Problems Caused to the Debtor by a Mechanics Lien:
- A mechanics lien is relatively easy to place and record, often done without any evidence, so the sytem is often abused.
- The instigator can request a foreclosure, which can force the debtor to sell the property to pay off the money owed.
- The homeowner may have to pay the original amount of money owed again; even though he has already paid the contractor in full. This can happen if the contractor has not paid the suppliers or his workers; the householder is still responsible under law for these debts.
- The lien is also recorded on the house title, and could possibly hinder the sale of the property by ‘clouding’ the title and even if the debt is paid off, potential buyers may still be wary.
Filing a Mechanics Lien in Court:
Following the recording of a mechanics lien in the County Recorder’s Office, the instigator has 90 days to file a subsequent lawsuit in court.
After this 90 day period, the lien will become obsolete but still remain on the house title, unless the instigator issues a release of lien. Nonetheless, if the lien is not released, the house owner can apply to have the lien erased from the title and may be eligible to claim court fees.
If the lawsuit is successful, the debtor can be ordered by the court to sell his property and pay off the debt. However, if counter claims are made it can turn out an expensive business, one to be avoided if possible.
- Legal Process of a Mechanic's Lien (http://construction-laws.com/mechanics%20liens.htm#whatisamechanicslien)
- Legality of Mechanics Liens (http://www.cslb.ca.gov/consumers/legalissuesforconsumers/mechanicslien/WhatIsAMechanicsLien.asp)
Image Credit (Morgue File)