Minnesota Mechanics Lien Requirements
Contractors & suppliers have strong lien rights in Minnesota. If a contractor or supplier isn’t paid on an Minnesota 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 Minnesota’s mechanics lien law.
Mechanics Lien Rights in Minnesota
Parties who furnish labor, materials, or services at the request of the owner, owner’s agent, general contractor, or subcontractor on a construction project have mechanics lien rights in Minnesota. Suppliers are well protected in Minnesota, as they can generally file a mechanics lien even if their materials aren’t incorporated in the project, provided the materials were supplied in good faith.
Suppliers to suppliers do not have protection under Minnesota mechanics lien statutes.
Minnesota usually requires preliminary notice for all parties on a construction project. The general contractor must generally provide the owner with a General Contractor’s Notice unless an exception applies. This notice is usually included in the contract, but if it is not, the notice must be sent by certified mail, or personally delivered, within 10 days after the work is agreed upon.
For those who did not contract directly with the property owner, the Lien Claimant’s Notice must be sent within 45 days of first furnishing labor/materials to the construction project. General contractors may also need to send this notice if they contracted with one, but not all, property owners. Like the General Contractor’s Notice, there are some exceptions to if it needs to be sent. It is best practice, however, to send even if an exception applies.
Minnesota mechanics lien deadline
No matter in which tier in the project a potential lien claimant is located, a mechanics lien in Minnesota must be recorded and served on the property owner within 120 days after the last date the lien claimant provided labors or materials to the project. This deadline, like the deadline in most states, is hard-and-fast; miss it, and lien rights are extinguished.
Mechanics lien priority
Minnesota mechanics liens are effective from the time the claimant began work on the project. Since mechanics liens relate back to the start of work (defined as the first date of actual physical improvement to the property), they can take priority over a mortgage if the first labor or materials were furnished to the property prior to the date the mortgage was filed.
Lien claim amounts
While the amount of the lien claim in Minnesota can include interest, it cannot include attorney’s fees, surety bond premiums, “soft costs,” and costs of extra materials that were not authorized by the owner. While attorney fees cannot be included in the lien amount, they are generally awarded to the prevailing party if a foreclosure action is needed.