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How to file a Property Lien/Legal Property Description

Recently went into contract. Both parties signed. Seller wants out. Received higher offer and agreed to buy out of the contract. Would like to place a lien on the property . Need more legal guidance.

3 replies

Jun 25, 2022

There are a number of considerations in deciding whether to pursue a mechanic's lien in Maryland. In no particular order, and not intended to be an all inclusive list, here are a few: 1. You are only entitled to a lien for work actually performed on the property in Maryland, and then only if repaired, rebuilt, or improved to the extent of 15% of its value. If you did not perform any work on the property (or the value of the work performed in not equal to or in excess of 15%, , then there is no mechanic's lien available. On the other hand, depending on what your contract says, you may be able to pursue a breach of contract or other action against the Seller. 2. Even if you did perform all the work, in Maryland you must initiate litigation by filing a petition to establish a lien (which results in an initial evidentiary hearing), followed by an action to enforce the lien if it is established by the court (which for all intents and purposes is not materially different from a breach of contract action...with discovery, pretrial and post trail motions and hearing, and the trial). All of that is expensive and time consuming, and you have the burden of proving both entitlement and costs. If you don't have a prevailing party right to legal fees in your contract, then even if you obtain a 100% recovery (which is rare), the net to you is substantially less after offsetting the costs you incurred in obtaining that relief. 3. As noted above, the cost of litigation and distraction from your business activities are significant, so you should serious consider negotiating a mutually agreeable buyout option. Generally, neither party "likes" the final settlement because one party feels like it gave up too much, and the other feels like is got too little. However, when viewed in light of cost and time avoidance, most who settle are better off. Unless you were contracted to provide significant

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Jun 26, 2022

Thank you Jim for your insight. I greatly appreciate it! Would we then file a memorandum of understanding, get it notarized and sent that to the county? I'm not too familiar with how that process would look like if we come to terms on an agreeable buyout option.

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Jun 26, 2022

If no legal process has been initiated, then any agreement would be a private matter of contract between the parties. Just make sure that the agreement is in writing, it is a full and final settlement between you and the owner, releases all claims that the parties have against each other upon your receipt of payment of the settlement amount in full, and is signed and dated by both parties.

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