On the one hand, mechanics liens are incredibly powerful tools that help thousands of contractors, subs, and suppliers get paid the money they’ve earned each and every day.
But on the other hand, the mechanics lien process is very challenging to manage, and the rules, regulations, requirements, and deadlines that stipulate how the process works are complicated and confusing. One small aspect of these rules covers how a mechanics lien must be signed in order to be valid.
Read on for a brief discussion of 3 things that folks in the construction business must know about how to sign a mechanics lien.
#1: Who Can Sign a Lien Claim?
Before we talk about who can sign a mechanics lien, let’s make it perfectly clear that a mechanics lien claim must be signed – this is a requirement in all 50 states. However, who is authorized to sign a lien varies from state-to-state depending on each state’s lien laws.
Some States Are Loose
Some states have relatively loose lien signature requirements, simply requiring that the “claimant or its agent” must sign. When states have this “claimant or its agent” language, it is largely okay for anyone with authority to sign the lien. The company can authorize a lawyer, a lien filing company, an admin, or just about anyone to sign their lien statement.
Other States Are Strict
There are a number of other states that are on the opposite end of the spectrum when it comes to lien signature requirements. These states will often require that the person signing the lien claim is the actual claimant, or at the very least, has a personal and direct knowledge of the debt.
As we said above, the signature requirement varies from state to state and you really need to know exactly how the state(s) where your projects are located handle this issue.
#2: Does the Lien Have to Be Notarized?
This is a very important question that has a different answer depending on the state. Check out “Does My State Require Liens to be Notarized?” to see mechanics lien notarization requirements for all 50 states.
#3: What’s the Difference Between “Signing,” “Acknowledging,” & “Swearing and Testifying Under Oath?”
Many people think getting a document notarized is a simple affair that means the exact same thing every time and everywhere. That is not the case.
Notarizing a document in its simplest form is getting a certification by an independent third party (a notary) that the person who signed the document actually signed the document. It is not a signature under oath or even an acknowledgment. It is just proof that the person who signed the document actually put his or her hand to the paper.
An acknowledgment is a higher standard that requires four additional steps. Chief among those steps is that the signer must physically appear before the notary.
However, in many states the mechanics lien notarization requirements are stricter than what we’ve described above. These states will often require the lien claimant (the “claimant” is the party filing the lien) “swear to” the contents or sign “under oath.”
This means the notary block must be more sophisticated and must declare that the claimant swore that the statement was true and that he or she was signing under oath, and in many cases, the notary must actually perform a “ceremony” where the signing party raises their hand and makes the oath out loud.