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Our client is in financial trouble in Ohio. Is a mechanics lien the best way to secure payment?

OhioMechanics Lien

I am an ongoing subcontractor in Ohio. Our client has been paying us for over a year. They have now started to default on payments. We have not field a Notice of commencement as the type of work we provide is billed by the time and not the project. Some of the work was in assistance with their production as a refinery and some was in building up their facility (real property). They have acknowledged the they owe the moneys due. They were working toward getting us paid in full but they now appear to be getting strained for new investors. I'd like to make sure that a mechanic's lien is the best approach.

1 reply

Oct 19, 2017

Subcontractors in Ohio are generally required to provide a notice of furnishing within 21 days from the claimant’s first furnishing of labor and/or materials, or within 21 days of the filing of a notice of commencement if the notice of commencement was filed late. A potential lien claimant is not required to give preliminary notice prior to the filing of the Notice of Commencement. If the Notice of Commencement is never filed, the preliminary notice is not necessary. Note, however, that it is the responsibility of "the owner, part owner, or lessee who contracts for the labor, work, or materials" to file the notice of commencement, not the subcontractor.

Ohio defines an "improvement" for which a mechanics lien may be claimed as: "constructing, erecting, altering, repairing, demolishing, or removing any building or appurtenance thereto, fixture, bridge, or other structure, and any gas pipeline or well including, but not limited to, a well drilled or constructed for the production of oil or gas; the furnishing of tile for the drainage of any lot or land; the excavation, cleanup, or removal of hazardous material or waste from real property; the enhancement or embellishment of real property by seeding, sodding, or the planting thereon of any shrubs, trees, plants, vines, small fruits, flowers, or nursery stock of any kind; and the grading or filling to establish a grade."

Mechanics liens are very effective in securing payment - but the decision to use a mechanics lien (when appropriate) rather than some other method to prompt payment is a case-by-case decision made by the potential claimant. When used appropriately, however, mechanics liens are phenomenally effective at making sure construction industry participants are paid for the labor and/or materials furnished to an improvement of property.

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