When it comes time to record a mechanics lien every company wants to file the minimum amount of documents. This makes perfect sense. The more documents you need to record the more expensive the lien process will be.
Things get a bit sticky when filing mechanics lien claims against a condominium construction project. This post is designed to provide a general overview of how these situations are usually handled by state laws.
Understanding How Ownership of Condominiums Works
When you pull up to a condominium complex you’ll pull up to a single structure. The structure may contain just 3 or 4 units, or it may contain 300 units. Nevertheless, it is a single building and it is very tempting to those filing lien claims to consider it a single structure and a single “project” or “property.”
Unlike an apartment complex, however, condominium complexes are not a single property. They have separate owners, separate assessor parcel numbers (APNs), separate tax bills, etc.
You probably can understand this very easily by thinking of some personal experience with a condominium. Perhaps you were interested in buying such a property, or you have a relative or friend with a condominium property. When you are the owner of a condominium unit you own that property separate and independent of the other units just as you own a property separate and independent from your next door neighbor in a traditional suburb.
The fact that each unit is individually owned seems simple enough, but since the units are all under one roof and all share “common elements” those filing liens can sometimes get things confused.
Common Elements = One Lien Against Entire Condominium Complex
Generally speaking, if you were contracted to furnish labor or materials to a condominium complex by a property management group or condo association, and you furnished that labor or materials to the complex’s “common elements,” you’ll be able to file a single mechanics lien claim against the entire complex.
The complex’s common elements would consist of the hallways, foyers, community rooms, outdoor areas, and similar facilities. Each condominium owner actually owns a proportional percentage of these elements and they are managed by the association or management company.
If you do work on these common elements and are unpaid, you can typically file a lien against the entire complex, which is a lien against the common elements. Every owner is theoretically indebted to your company in proportion to their ownership.
Some states require you to list every condominium unit owner, and other states allow you to just list the condo association on the lien document itself.
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Work On Individual Units = One Lien For Each Unit
This is exactly the same situation as if you were working in a traditional suburb and performing work on multiple houses in the same neighborhood or on the same street. Unlike work that is performed on the common elements, if your company furnishes labor or materials to individual condominium units, you’ll be performing separate projects on separate properties.
Most states require you to file a separate, individual mechanics lien for each unit.
Note that if you are furnishing labor or materials to a ground-up condominium project there may be a different result. In this circumstance, the units have not yet been sold, and therefore, everything is owned by one party as a single, non-subdivided structure. One mechanics lien filing usually does the trick in these circumstances.