The world of mechanics liens is full of deadlines that both contractors and project owners need to keep in mind. From preliminary notice requirements, notices of intent, and filing a lien, there’s a lot to know. Whether you’re filing a lien or had a lien filed against your property, you’re probably wondering “How long does a lien last?”
That’s a good (and important) question to ask. While there are some state regulations that affect the answer, there are some general need-to-knows about what happens after filing a lien.
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Mechanics liens expire
Mechanics liens are a different animal than mortgage or tax liens. A mortgage lien will exist as long as the money is owed on the original mortgage amount, while a tax lien will remain until the property owner pays the tax bill. A mechanics lien, on the other hand, will expire after a certain amount of time.
How long does a lien last? It depends on the state, but most mechanics liens expire sometime between 90 days and a year. At that point, the lien is no longer valid and can be removed. We’ll go a little further into how that works in a bit.
The contractor needs to enforce the lien before the deadline
If mechanics liens just expired and disappeared at a certain point, they wouldn’t be very effective. Instead, how long a lien lasts is based on the deadline by which the contractor can enforce the lien. If they don’t take action by the time it rolls around, they’ll lose their chance to recover their payment with a mechanics lien.
To enforce a lien is to initiate a lien foreclosure lawsuit. It has to be drafted, filed, and served appropriately just like any other lawsuit. The entire foreclosure process does not need to be settled within the window, but a contractor will have to take steps toward filing by the deadline so they don’t lose their rights. At a minimum, the lawsuit should be filed with the court.
Date of filing vs last furnishing
Not only are the windows relative to the state of the lien filing, they also vary in regards to when the window starts.
In some states, contractors have a set window that starts from the date the lien is filed. So, in the case of a state with a six-month window from filing, a lien filed on January 31 would expire on June 31.
In other states, contractors will have a set amount of time from last furnishing labor or materials. So, if the statute says they have six months from last furnishing, and their last day on a project was January 31, they’ll have until June 31 before the lien expires. This is true even if they filed the lien in March or April. The window starts from the day that they were last on the project.
There can be lien extensions
While all states have a deadline by which the contractor must enforce the lien, some allow for extensions. If the deadline is approaching and the contractor isn’t prepared to foreclose on the lien or believes the owner will make good on the lien amount, they might want to extend the lien rather than give up their claim.
The states where an extension is a possibility include:
The property owner can shorten the window
There are some states where a property owner facing a mechanics lien can shorten the window. If the property owner believes the lien to be invalid or thinks they have a good chance of winning in the event of a lawsuit, they can file a Notice to Foreclose.
Generally, a Notice to Foreclose gives the contractor 30 days to start the foreclosure process. This one document can turn a 6-month window into a 30-day window (plus the amount of time it takes to file the notice). If the contractor is unable to initiate the foreclosure process within that window, the lien will become invalid just as it would at the end of the standard window.
Regardless of the outcome, the lien may have to be released
Mechanics liens end in a few possible outcomes. The contractor might fail to enforce the lien in time, the court can decide who wins the case, the contractor can get paid, or the lien could be invalid.
But in some states, the lien doesn’t just disappear. The contractor needs to formally release it.
In states that require the contractor to release the lien, the contractor has to file a lien release with the county clerk’s office. And, as you might guess, there can be deadlines as to how long the contractor has to release the lien.
The deadline to release the lien comes in two main forms: the deadline based on the date of payment, and a deadline based on written demand.
In some states, like Arizona, Kentucky, and Maine, contractors have to release the lien within a specific amount of time from the date that the lien is satisfied. In other states, like Colorado, Iowa, and Mississippi, contractors have a certain amount of time from the date they receive a written demand to release the lien.
Most states will hold the contractor liable for penalties and fines if they don’t release the lien by the specified deadline. The penalties vary by state, ranging from nearly nothing to several hundred dollars each day.
Requirements and deadlines are everything
Lien rights are important, and both contractors and project owners need to understand them. The deadline to enforce the lien isn’t the only requirement worth watching.
Many states require contractors, subs, and suppliers to send preliminary notices by a certain deadline to protect their lien rights. Pros need to understand this so they don’t give up their rights prematurely. Project owners should become familiar with them as well; if contractors don’t send these notices on time, they might not have the right to file a lien against the property.
And when it comes to mechanics liens, contractors have a certain deadline by which they can file them. Both contractors and project owners need to understand the requirements in their states to manage these effective tools.
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