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Does mechanics law apply?

I had a demolition contract with “Company A.” I paid the contractor in full. Project was completed as contracted. A bulldozer was required to be used. Company A’s father (who owns Company B for which I had no contract) already had a rented bulldozer for another project. So, it was used to do my project. Company A did not sign a lease for the bulldozer. I did not sign a contract for company B. I doubt Company A officially sub contracted Company B (as they are father and son with separate demolition companies) Bulldozer was picked up by leasing company at my property where the is a company A sign in the yard. Apparently, Company B has not paid the equipment rental lease. I received a letter threatening a lien on my property. Can they legally place a lien?

1 reply

Sep 18, 2019

Maryland lien claimants need not have a written contract in order to file a mechanics liens. Further, an owner doesn't have to specifically approve of a subcontractor, supplier, or equipment rental company in order for their contractor to sub out work or place orders with suppliers or equipment renters. So, even if an owner isn't initially aware that an equipment rental company has provided equipment on their project, that equipment rental company may still be entitled to filing a lien against the project property. However, there are a few details here that are worth diving further into. Right to lien, generally For one, equipment rental companies have the right to file a mechanics lien when they lease equipment for the improvement of the project property. But, if the equipment wasn't actually leased for use on the project property - that might get interesting. Under §9–102 of the Maryland mechanics lien statute, lien rights are available for the "leasing of equipment...for use for or about the building or premises." So, in a situation where the equipment wasn't actually leased for work on the property to be liened (but rather, it was stolen or borrowed), there may be an open question as to whether mechanics lien rights would be available. Notice of Intent to Claim Lien Another key consideration will be how long ago the project was performed and whether the appropriate notice was sent. In Maryland, lien claimants who are not hired directly by the property owner must provide a Notice of Intent to Claim Lien in order to preserve their lien rights. This notice must be sent within 120 days of last furnishing labor or materials to the project. So, regardless of whether there is actually a valid right to lien in the first place, if more than 120 days passes after the lien claimant's equipment was last supplied befoe a mechanics lien is filed, then the claimant would not be able to later file a valid and enforceable mechanics lien. For an example of what that notice may look like: Maryland Notice of Intent to Lien Form. Limitation on amount of lien If the project is being done at the owner's residence (and if that residence is a single-family home), then there's a limitation on what amount can be liened. Under §9–104(f)(3) of Maryland's lien statute, a sub-tier claimant's lien is limited to the amount owed and unpaid to the owner's prime contractor at the time the Notice of Intent to Claim Lien (described above) is given. Meaning, if the contractor on a single-family, owner-occupied residential project was paid in full, sub-tier lien claimants wouldn't be entitled to file a mechanics lien. I hope this information was helpful. Considering the drastic nature of mechanics lien filings, if it looks like a mechanics lien claim is imminent, it might be wise to consult a local construction or real estate attorney. They'd be able to review the situation in detail and advise on how best to defend the property against a potential lien claim. As a last note, I think these resources may be helpful, too: (1) I Just Received a Notice of Intent to Lien - What Should I Do Now? (2) A Mechanics Lien Was Filed on My Property – What Do I Do Now?

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