“You can’t wait for inspiration.
You have to go after it with a club.”
There’s nothing worse for a construction company than waiting for a long overdue payment for project work that was successfully completed long before. It takes longer to get paid in the construction business than in almost any other line of work. And while we would certainly understand the frustration that might prompt a construction business owner waiting for a delinquent payment to perhaps go after the payment ‘with a club’ like Jack London, we’re here to tell you that there’s a much better tool available to you: the mechanics lien.
Mechanics lien can work in many ways to get you paid, but the most important thing to remember is that they work. Mechanics liens give the property owner (and other parties up the contracting chain from the claimant) a strong incentive to pay because a mechanics lien gives a lien claimant an interest in the improved property itself. This statutorily provided property right promotes far payment, and empowers construction participants to go get work and not worry about eventual payment of what they have earned and deserve.
If you’re a construction company with a payment issue on a project located in Alaska, you might want to consider leveraging your lien rights to get paid the money that you’ve earned. This step-by-step guide (starting in the next paragraph, below) will tell you how to go about it. It’s important to remember that there may be preliminary notice and timing requirements that need to be met before a valid Alaska mechanics lien can be filed. And, it can be complicated and time consuming to file a mechanics lien by yourself. But, if you’ve decided a mechanics lien is the way to go to get paid, and once you’re ready to file, just follow the steps below to start the lien process.
Make Sure Your Alaska Mechanics Lien Has the Required Information
It is important to make sure that your Alaska mechanics lien contains all information required by statute. The failure to include the proper information can invalidate your lien claim. Note that an Alaska mechanics lien must be “verified by the oath of the claimant or another person having knowledge of the facts.”
The information required to be included on an Alaska mechanics lien is clearly set forth by Alaska statute § 34-35-070, as follows:
1. The real property subject to the lien, with a legal description sufficient for identification
2. The name of the owner;
3. The name and address of the claimant;
4. The name and address of the person with whom the claimant contracted;
5. A general description of the labor, materials, services, or equipment furnished for the construction, alteration, or repair, and the contract price of the labor, materials, services, or equipment;
6. The amount due to the claimant for the labor, materials, services, or equipment; and
7. The date the last labor, materials, services, or equipment were furnished.
In Alaska, the requirement to include the “legal description (of the property) sufficient for identification” can be difficult and unclear. First, there are many parts of Alaska where finding a legal description of the property is just about impossible. And second, the requirement is not as clear as it appears: perhaps because of or as at least as an acknowledgement of the difficulty of obtaining certain legal descriptions in Alaska, courts have very occasionally taken into account circumstances and the place where the lien is recorded to allow less-than formal legal descriptions within mechanics lien claims. Remember that this is an (rare) exception to an especially clear statutory requirement, and it should not be relied on when preparing your own lien claim paperwork. In order to assure that a mechanics lien is not invalidated for a lacking property description – the correct legal description should be obtained.
It’s also important to note that failing to give credit in the amount due for all just credits and offsets can invalidate the lien claim, and failing to name all owners can exempt the unnamed owners from the lien.
How To File an Alaska Mechanics Lien
Now the lien form has been drafted, it’s time to file your Alaska mechanics lien. Alaska requires that mechanics liens be recorded in the recorder’s office in the recording district where the liened property – the site of the construction project itself – is located – the same state office in which deeds are recorded.
- 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 the lien (and copy, if applicable) to the recorder’s office in the recording district where the liened property is located (this can be by mail, FedEx, some other carrier, or by physically taking the lien to the recorder’s office yourself or by courier).
– 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 recorder’s office.
– 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.
- Alaska 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 anyway, just to be safe.
Serve Your Alaska Mechanics Lien
As noted above, Alaska does not require that mechanics liens be served after recording. This, however, is likely not the most effective way to get you paid. 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, knowledge of the lien can prompt payment in consideration for getting the lien released, and enforcement of the lien never becomes necessary.
However, the fact that there is no specific service requirement means that, if you want to send a copy of the lien to the property owner (or any other party) in order to prompt payment, it can be sent via any way you see fit.
Congratulations! Once the lien document has been filed – your Alaska mechanics is lien ready to get you paid what you’ve earned. While this is a powerful tool to get you paid – it is not necessarily a golden bullet. It is still possible for the lien to be challenged, or even determined invalid, and it is possible that if it is disputed, it may take a long time to get paid, even if the lien is determined valid. 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 an Alaska mechanics lien generally stays effective for 6 months from the date on which it was recorded – BUT NOTE that Alaska mechanics liens can be extended for an additional 6 months, if the extension is recorded within the original 6-month period.
Recording a mechanics lien can be a powerful tool in making sure you are paid what you earned. This How-To Guide can empower you to take that step when and if it becomes necessary, and make sure you are treated fairly.