Home>Levelset Community>Legal Help>We recently filed a notice to owner for unpaid work thru Zlien. Now, the homeowner is selling the unit. What do we need to do next so that we can still get paid?
We recently filed a notice to owner for unpaid work thru Zlien. Now, the homeowner is selling the unit. What do we need to do next so that we can still get paid?
There are a couple of things to consider here. The first thing to keep in mind is that a notice to owner is not a lien - while a preliminary notice is usually a prerequisite to later filing a valid mechanics lien, that mechanics lien is an additional step. Once a mechanics lien is filed, it encumbers the property and can hold up a potential sale until the lien is paid.
A mechanics lien clouds the title to the property against which it is claimed (and allows the property to be foreclosed upon and sold to satisfy the debt). Since it is difficult to get a buyer to agree to purchase a property without clear title, and that may be foreclosed, a valid lien can throw the breaks on the deal and get you paid. If there is sufficient time, sometimes a notice of intent to lien can have the same result without needing to actually file the lien itself.
In some cases, even if the property is sold and the closing occurs prior to the lien being recorded, it's not the end of the potential claim. the general rule is that if the lien in filed within the statutory deadline, the new owner becomes responsible for the debt. A mechanics lien is a claim against the improved property itself – yes, the owner involved, but really is just kind of along for the ride. In a case where an innocent third party purchases the property, they will generally be liable to satisfy the lien claim and will need to seek recovery from either the original owner, or, potentially, the title insurance company. This can be limited, however, in states (like Florida) in which the lien is limited to the amount due from the property owner to the GC.
Long story short, the usual next step after sending a preliminary notice is to either send a notice of intent to lien (which is not required but can sometimes result in payment) or jump straight to filing the lien itself.