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Home>Levelset Community>Legal Help>Our customer is saying that our lien is causing issues with his construction loan and the bank. What should we do?

Our customer is saying that our lien is causing issues with his construction loan and the bank. What should we do?

ArizonaMechanics LienRecovery Options

We filed a lien and our customer is saying that the lien is causing issues with his construction loan and the bank. What should we do? The loan might be for payment of our services but we don't know that for sure.

1 reply

Sep 27, 2019
Before getting too far along, it's worth noting that this is sort of the point of a mechanics lien - so it's not bad news! Mechanics liens create issues with the property title, forcing payment on the debt. Mechanics liens regularly cause issues for owners who are using construction lenders, selling their property, or otherwise will be taking out a loan against the land. And, because of the issues that mechanics liens can create for an owner, lien claimants will have leverage to compel payment. Ultimately, if a property owner is complaining about a lien affecting their property, it's up to the lien claimant to respond - each circumstance is different, and what's right for one business might not be right for another. But, mechanics liens are intended to be adversarial. And, it's little surprise that an owner would be frustrated about a lien filing. Options for recovery when a claimant doesn't want to proceed with a lien Mechanics liens certainly aren't the only method of payment recovery. In fact, we've written an article on options for recovery when a claimant doesn't want to utilize a mechanics lien: Don’t Want to File a Mechanics Lien? Here Are 5 Other Options. That article mostly identifies options to use instead of filing a mechanics lien - but, if a mechanics lien has already been filed, it should be easier to leverage that lien into having an owner enter a separate agreement to secure payment - like a promissory note or personal guaranty. But, as mentioned above - mechanics liens are intended to make a property owner uncomfortable, and the damage a lien can do to the property title is the strongest asset a lien has in forcing payment.
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