Sweet Home Alabama
Where Mechanics Liens Exist Just For You*
*if you’re in the construction business, that is
Mechanics liens can be a useful tool to get participants on construction projects the fair payment they have earned.
There are many ways mechanics liens help get you paid, but the most important thing to remember is that they do work. Mechanics liens give the property owner (and other parties up the contracting chain from the claimant) a strong incentive to pay what’s due by giving the lien claimant an interest in the property improved during the construction project itself. This statutory back-up empowers construction participants to go get work and not worry about eventual payment of what they have earned and deserve.
If you have decided to file a mechanics lien in Alabama (by the way, the Levelset office includes a number of SEC fans, and those rooting for the Alabama schools are pretty evenly split between RTR! and War Eagle!), this step-by-step guide will tell you how. It’s important to keep in mind that there may be preliminary notice and timing requirements that need to be met prior to filing a valid Alabama mechanics lien and, it can be complicated and time consuming to file a mechanics lien by yourself. But, once you’re ready to file, just follow the steps below to start the lien process.
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Special Note – Two Different Kinds of Mechanics Lien in Alabama Can Change Prelim Requirements
As noted above, there can be preliminary notice requirements that must be met prior to filing a valid mechanics lien. In Alabama these notices can change depending on the claimant’s role and the type of mechanics lien s/he is allowed to file. There are two types of liens in Alabama: a Full Price lien and an Unpaid Balance lien.
Full Price liens are available to prime contractors, any other party in direct contract with the owner, or a material provider who has previously delivered a notice to owner to the property owner before the delivery of materials.
For the remaining parties (that didn’t contract directly with the owner), Unpaid Balance liens are available after a notice of unpaid lien has been delivered to the property owner.
Delivery of the notice of unpaid lien notice puts the owner on notice that a lien is claimed, and requires the owner to withhold funds sufficient to satisfy your claim – but if the owner isn’t still holding enough cash to cover the claim – the claimant is limited to the amount remaining to be paid to the GC* (see note below).
Therefore, if you’re a subcontractor in Alabama, the earlier your notice is sent, the more likely it is to be received before the owner disburses those funds to the prime contractor, and before you lose any rights thereto.
*NOTE: Imagine you’ve subcontracted in Alabama and your deadline to file a lien is in 25 days, but the property owner has already paid the general contractor in full. You can file your lien, but because you can only claim the amount still owed by the owner to the GC – i.e. the “Unpaid Balance” – there is no money left for you, the subcontractor, to lien.
Make Sure Your Alabama Mechanics Lien Has the Required Information
It is important to make sure that your Alabama mechanics lien contains all the information required by statute. The failure to include the proper information can be fatal to a lien claim. Note that an Alabama mechanics lien must be verified by the oath of the person claiming the lien, or of some other person having knowledge of the facts.
The following information must be included on a Alabama mechanics lien:
1. The amount of the demand secured by the lien, after all just credits have been given
2. The name and address of a claimant
3. The name and address of the property owner
4. Description of the property being liened
5. Description of services, labor, materials, equipment, and/or work provided by the claimant
Note that, while not specifically set forth by § 35-11-213, it is likely a good idea to also include the name and address of the party that hired you. Further, Alabama provides guidance regarding the “description of the property” that makes it easier than it may be in other states. Alabama specifically does not require a legal description of the property and considers “a description by house number, name of street, and name of city or town” to be a sufficient description when the property is located in a city or town.
Note further, that Alabama lien law is relatively lenient (say that 3 times fast!) regarding the contents of the lien document, in that “no error in the amount of the demand or in the name of the owner or proprietor, shall affect the lien.” It is always better, however, to have correct information on your filed document.
How To File an Alabama Mechanics Lien
Now it’s time to file that Alabama mechanics lien. Unless the lien is filed in the office of the judge of probate of the county in which the property upon which the lien is sought to be established is situated, the lien will be lost.
- Prepare your lien form, taking care to include the necessary information as set forth above. If you want a copy of the lien for your files, make a duplicate of the lien form.
- Send your the lien (and copy, if applicable) to the office of the judge of probate of the county where the real estate being liened is located.
– Make sure you have the appropriate margins on the lien document – this can change by county, so it helps to either look up recording requirements online via the clerk of court’s website, or through calling the applicable office to ask.
– If you have decided to personally deliver the lien for recording, or if you mail/FedEx the lien to the appropriate county, the proper recording fees must be included with the lien. Counties often reject liens for improper fees, which could possibly result in a missed deadline, if the lien must be resubmitted. Recording fees can be determined by calling the county recorder, checking on the clerks office’s website, or asking in person if you physically bring the lien for filing.
- Once the document is recorded, a stamped copy of the recorded lien can be obtained for your records if you provided an additional copy to the office of the judge of probate.
– Note that if you mailed your lien to the county for recording, rather than physically taking it in or using an electronic recording service (if applicable) you will not only need to include a) the proper fees for recording with the document; you will also need to include b) a self-addressed stamped envelope with return instructions if you wish to receive a copy of the recorded lien for your records.
- Alabama law does not require that a mechanics lien be served on the owner of the liened property – but it may be a good idea to do so.
Serve Your Alabama Mechanics Lien
As noted above, Alabama does not require a mechanics lien to be served on the property owner after recording. This, however, is likely not the best idea. Since the purpose of filing the mechanics lien is to get you paid what you deserve, giving the owner prompt notice of the lien’s filing will likely further that goal. Waiting until either the owner learns about the lien on his own, or until you initiate a suit to enforce the lien is counter-productive. In many cases, enforcement of the lien is not needed if the property owner is made aware of the lien’s existence.
The fact that there is no specific service requirement means that you can send notice of the lien to the property owner any way you see fit – save money in postage by sending regular first class mail, or get proof of delivery by sending certified – it’s your choice.
Congratulations! Once the lien document has been filed – your Alabama mechanics is lien ready to get you paid what you’ve earned. While this is a powerful tool to get you paid – it is still possible for the lien to be challenged, or even determined invalid. Remember that just because a lien is recorded doesn’t necessarily make it valid, and likewise, just because a property owner (or their attorney) may make a claim that it is improper and needs to be removed doesn’t make it invalid.
Finally, remember the expiration notice on the lien itself – an Alabama mechanics lien stays effective for 6 months from the date on which it was recorded – after that date the lien expires, and it cannot be extended.
Recording a mechanics lien can be a powerful tool in making sure you are paid what you earned. The Alabama How-To Guidecan empower you to take that step when and if it becomes necessary, and make sure you are treated fairly.