Unfortunately, payment issues are pretty common in the construction industry. Luckily, construction is also home to an extremely powerful remedy for payment issues – an Oklahoma mechanics lien. While filing a mechanics lien probably shouldn’t be the first option for recovery, if it comes down to it, it’s important to know how the lien process works in the states where you do most of your work.
Let’s take a look at how Oklahoma contractors, subs, and suppliers can secure their right to payment with an Oklahoma mechanics lien.
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Who Has Mechanics Lien Rights in Oklahoma?
Parties who provide labor or materials for the “erection, alteration or repair of an improvement” will have lien rights. This includes contractors (and specialty subs), material suppliers, and some others.
Lien rights in Oklahoma also extend to architects, engineers, landscapers, and, in some cases, equipment renters. However, in order to have a valid mechanics lien, architectural or engineering work must result in some sort of actual improvement to the property. Plans that are not incorporated don’t count.
Finally, note that construction staffing companies may or may not have mechanics lien rights, depending on their contract. More on that here: Do Oklahoma Staffing Companies Have Mechanics Lien Rights?
Are there Notice Requirements Before Making a Lien Claim?
First, it depends on the tier of the claimant. In other words, parties who contract directly with the property owner do not need to send notice to the property owner. For everyone else, notice must be sent unless one of the following exceptions applies:
- The work is less than $10,000;
- The property being improved is residential (4 units or less) it isn’t necessary to send a preliminary notice.
If the property is commercial or if the work exceeds $10,000, notice must be given within 75 days of the last date of furnishing.
What’s the Deadline for an Oklahoma Mechanics Lien?
In Oklahoma, the deadline to file a mechanics lien again depends on the claimant’s role on the project.
Those who were hired directly by the owner have 4 months from the last day that labor/materials were furnished to the property. All other project participants (subs, suppliers, etc.) have just 90 days from the last date of furnishing labor or materials.
What’s Required on the Claim Form Itself?
Not only does your Oklahoma mechanics lien need to be notarized, but also needs to include an affidavit verifying the information on the lien is accurate and truthful.
The lien must also include the following information:
- Claimant’s name
- Amount of the claim
- Description of the labor/materials provided
- Names of the owner and prime contractor
- Legal description of the property
Notice to the Owner that the Lien Is Recorded (Filed)
Once the lien is recorded or filed, the claimant must send notice to the owner. Technically, the clerk of the court is required to send notice to the owner within 5 days. However, as a precaution, it’s a good idea for claimants to send a copy themselves — it may even help resolve the claim more quickly!
If the owner cannot be found within 60 days after the lien was recorded, an affidavit may be filed, stating that the claimant performed “due diligence” to locate the owner. After such a filing, the lien claimant must send notice of the lien to the occupant of the property or post it on the property itself — and this will fulfill the above notice requirement.
What’s Next After Filing a Lien?
Still not paid? The next “official” step is often to consider enforcing or foreclosing the filed mechanics lien. An enforcement action actually requires initiating a lawsuit. The deadline to enforce an Oklahoma mechanics lien is 1 year from the date the lien was filed. Note, however, that Oklahoma is a rare state that makes a claimant wait before they can enforce their lien. An Oklahoma claimant must wait at least 90 days after filing their lien to enforce it. So, in reality, a claimant has about a 9-month window to enforce their lien.
However, as long as there’s time before the enforcement deadline, many claimants have found that adding a step can help recover payment without the need for a potentially expensive lawsuit. This step is sending a document called a Notice of Intent to Foreclose. A Notice of Intent to Foreclose warns recipients that if payment isn’t made soon, the lien claimant will enforce their lien. The consequences of a lien enforcement action can be dire for an owner. Sending this notice offers an opportunity to avoid that lawsuit by resolving the payment issue. Plus, if a Notice of Intent to Foreclose is not effective, the claimant can still enforce their lien!