5 Essential Things to Know in Alabama
Contractors & suppliers have strong lien rights in Alabama. If a contractor or supplier isn’t paid on an Alabama job, they can turn to filing a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed. Here are 5 essential things you need to know about Alabama’s mechanics lien law.
Preliminary notice is necessary if you did not contract directly with the owner, but timing is relaxed
Alabama law does not require an “original contractor” to send a preliminary notice. An original contractor is the party who contracted directly with the owner.
For everyone else, there are a few things to know about notices.
First, anyone who did not contract with the owner must deliver a Notice of Unpaid Lien to the property owner. Alabama law does not specify the time by which this notice must be received by the property owner — only noting that it must be before filing the lien.
Second, however, a special optional rule exists for material suppliers, whereby these parties may file a Notice to Owner Prior to Performance (also known as “Notice to Owner Before Work”) to obtain the same lien rights as an “original contractor.” To gain the advantage offered by this notice, however, the material supplier must file it prior to furnishing materials.
Get more detailed information here: Alabama Preliminary Notice FAQs & Guide.
Your deadline to file an Alabama mechanics lien is dependent upon your role in the project
The deadline to file an Alabama mechanic’s lien is dependent upon the status of the lien claimant, and contingent upon first providing notice to the property owner. After providing notice to the owner, the deadlines to file a lien are as follows:
– Laborers: must file within 30 days of the date labor was last provided
– Original Contractors: Must file within 6 months after the entire debt becomes due
– All Other Claimants: Must file within 4 months after work or materials last provided
There are different types of Alabama mechanic liens
There are two types of Alabama Mechanics Liens, the “Unpaid Balance Lien” and the “Full Price Lien.”
An Unpaid Balance Lien is available to parties without a contract with the owner and is only effective to money actually in the hands of the owner at the time the Notice of Unpaid Lien is delivered to the property owner.
A Full Price Lien is a lien in favor of general contractors or others in direct contact with the owner, OR materialmen who gives a Notice to Owner PRIOR to furnishing materials to the project.
Know the foreclosure deadline
Mechanics lien claims do not last forever.
Alabama mechanics lien law requires that a mechanic’s lien be enforced within 6 months from the date the entire amount became due. If this 6-month period passes without an action being filed to enforce the lien, the lien expires. This period is the same time period in which a prime contractor’s lien must be filed. Watch out for letting your lien claims expire right under your feet — check out this Question & Answer in our Expert Center: What’s Next? Alabama Lien has been filed for a while.
Alabama mechanics lien rights are (maybe) waivable
States generally fall into one of two categories: those who allow claimants to waive their right to lien in a contract before work is ever performed, and those who do not. The vast majority of states fall into the latter category, but Alabama may be an exception here. This is explored more completely in our FAQs on Alabama Lien Waivers.
The bottom line is this: be careful what you sign in Alabama.