Five Ways to Lose your Mechanic’s Lien

Maryland courts proclaim that the mechanic’s lien statute is to be construed “in the most liberal and comprehensive manner in favor of mechanic’s and materialmen.” T. Dan Kolker, Inc. v. Shure, 209 Md, 290, 296 (1956). Unfortunately, there are several ways a subcontractor can lose its right to bring their mechanic’s lien claim.

 

 

 

Here are the top 5:

  1. Failure to timely serve notice. Maryland requires that a subcontractor must, “within 120 days after doing the work or furnishing the materials” give written notice to the owner of its “intention to claim a lien.” RP§ 9-104(a). If this notice is not given in time, the right to a mechanic’s lien is lost. In one case, the subcontractor attempted to serve the notice by certified mail. While the notice was mailed within the required time, the mail was returned. The subcontractor then personally served the owner after the time had expired. The court held that in the absence of evidence that the owner refused delivery of the letter to avoid service, the service was outside the required time and the subcontractor had no right to a lien. Mardirossian Family Enterprises v. Clearail, Inc., 324 Md. 191 (1991).

 

  1. Failure to name the proper owner. Yes, the contract may state the name of the purported owner, but obtain a copy of the deed to the property before accepting this as correct. Naming the wrong party means no lien rights. In other words, trust but verify – never believe what is listed in the contract. Serving the owner of tenant work can be even more complicated, and is the subject of another blog entry entirely.

 

  1. Failure to write the notice properly. Certain information must be provided on a "Form of Notice" (RP§ 9-104(b)).   If any of the required information is not provided, the lien claim fails. A supplier found this out the hard way.  The company did not include the date materials were delivered to the job-site on his Form of Notice. The court dismissed the supplier’s lawsuit stating that the owner had the right to be notified of the dates the material was delivered. Gravett v. Covenant Life Church, 154 Md. App. 640 (2004).

 

  1. Failure to properly serve the notice. The law requires that the subcontractor’s notice be served on the owner by registered or certified mail, return receipt requested, or by personal delivery. The safest way to meet this requirement - after determining the actual property owner (or tenant) - is to serve the corporate resident agent. However, if this is not possible, service can be by posting ‘on the door or other front part of the building.” Just make sure you have two people do the posting – one to post and the other “a competent witness.” It never hurts to take a picture of the lien being posted.
  1. Failure to file the lawsuit in time. The petition to establish and enforce the mechanic’s lien must be filed “in the circuit court for the county where the land ... is located within 180 days after the work has been finished or the materials furnished.” RP§ 9-105. The petiton must be under oath and have attached “material papers .. which constitute the basis of the lien claim.”

 

These are just a few of the ways a subcontractor can lose its lien rights. Since mechanic’s liens are “unknown at common law” and are a “creature of statute.”  Aviles v. Eschelman Elec. Corp., 281 Md. 529, 536 (1977). They are only obtainable if the subcontractor fully complies with all the requirements of the mechanic’s lien law.

 

If you have any questions about filing a Mechanic's Lien, please feel free to send me an email at dspence@spencebeckerlaw.com, or call me(301) 537-5991, or, if you're on your mobile device, just hit the "call" button at the bottom of your phone.

no replies

Leave your comment