If you’re unpaid on a construction project in the Bluegrass State, you’re probably already pretty frustrated. The good news is that there are powerful, legal tools available — called mechanics lien rights — that can help you get the money you earned. However, utilizing these tools can be very challenging.
But that doesn’t have to be the case! Here’s a no-nonsense guide to filing a Kentucky mechanics lien.
Before Filing a Kentucky Mechanics Lien…
There are a few considerations to keep in mind prior to taking the plunge on a mechanics lien. Namely:
- Is it time to deploy a mechanics lien filing?
- Do you have the right to file a lien?
- Is (or Was) notice required to preserve the right to lien?
1) Is it time to deploy a mechanics lien filing?
If you’re reading this, you’ve probably already decided it’s time to file a lien. But remember – a mechanics lien is a nuclear option. There may be other options for recovery available – options that can help keep industry relationships intact and that can keep the lawyers on the sideline.
Notably, the mere threat of a lien can often get potential lien claimants paid. As we discuss in this article, mechanics liens are a powerful tool that can work to compel payment on a number of different levels (we came up with 17!).
Because mechanics liens are so powerful, sending a threat of lien — like a Notice of Intent to Lien — can be really effective. We discuss that idea in-depth here: What is a Notice of Intent to Lien, and Should You Send One?
2) Who Can File a Kentucky Mechanics Lien?
Kentucky lien rights are generally pretty expansive, but they don’t include everyone. Double-check to make sure you’re able to file a claim before proceeding. The following parties maintain the right to file a mechanics lien in Kentucky:
- Prime contractors
- Material Suppliers
- Equipment Lessors
- Licensed Design Professionals (Architects, Engineers, Surveyors)
However, suppliers-to-suppliers are not protected under Kentucky’s mechanics lien rights.
3) Is Notice Required to Secure Your Lien Rights?
In just about every state, there are specific notice requirements that must be followed in order to file a mechanics lien. While Kentucky does not require notice prior to beginning work on a project, they do lay out certain notices to prioritize lien claims.
Contractors can file a Notice of Contract to protect the priority of their lien claim. Without sending Notice of Contract, subsequent mortgages or conveyances could take priority even though they were made after work began.
Also, a Notice to Owner is required from any party who didn’t contract directly with the property owner. When the party looking to file did not contract directly with the owner, they must send the owner a notice of intent to file a lien with 75 days from the date they last provided labor or materials to the project. Notice is not required if and only if the contractor directly contracted with the owner or his designated agent.
It’s also worth noting that Kentucky is what’s called a “Full Price State”. That means a lien secures money for the total amount of work that has been provided by the claimant – regardless of what payments have been made to the general contractor.
More help here: Kentucky Mechanics Lien and Notice FAQs
What Information is Required on the Lien?
Alright, so it’s time to file a Kentucky mechanics lien. But what information must be included? Kentucky isn’t a state that provides a specific lien form in its lien statute, but there is information that must be included in any claim of lien.
- The name and address of lien claimant
- The amount due to the claimant
- A description of the property that is “sufficiently accurate to identify it”
- The name of the property owner
- A statement indicating whether the materials or labor were provided under a contract directly with the owner or with a contractor or subcontractor
Importantly, the lien statement must be notarized.
When to File
In Kentucky, the lien claim must be filed within 6 months from the date material or labor was last furnished. Keep in mind, generally, this relates to the last date that significant work was provided – so things like punchlist items or warranty work typically won’t extend the timeframe for filing a lien.
When deciding which date was your last date on the job, it’s typically a safer bet to keep it conservative. By taking too many liberties, a lien claim could end up invalid or unenforceable.
Filing the Lien and Sending Notice
Kentucky mechanics lien claims are filed with the County Clerk’s Office in the county where the property is located. When filing, you’ll need to provide the exact filing fees – so it’s usually a good idea to call the clerk’s office beforehand to confirm the cost of filing.
After the lien is filed, a lien claimant then has 7 days to send the owner a copy of the lien statement to the owner’s last known address. While proof of service is not required, it is never a bad idea. However, serving the owner with a copy is extremely important – if this step is forgotten, the lien is dissolved.
What’s Next After Filing?
Mechanics liens really have two deadlines – the deadline to file the lien, and the deadline to enforce it (meaning, to file suit based on the claim). For Kentucky mechanics liens, if payment isn’t made, a claimant will have 1 year to file a lien enforcement suit.
But 1 year is a long time! That’s 365 days to negotiate and try to resolve the dispute without having to resort to a lawsuit, and it’s almost always preferable to avoid taking to the courts.
When a lien has been filed and payment is still not being made, there’s a tool that can be helpful to force payment without needing to file a lien. We’re talking about a Notice of Intent to Foreclose.
A Notice of Intent to Foreclose acts as a threat. It states that, if payment isn’t made soon, the lien will be enforced. Because mechanics liens can be such a drastic remedy, a Notice of Intent to Foreclose can be incredibly effective.