If you own a business, you will have a number of expectations in terms of providing a service. The main expectation that you will have is that your services are paid for. Sometimes, unfortunately, a customer refuses to make payment even after you have sent various notices and made numerous requests. In this case, mechanics liens may be the only option that remains available to you.
How Can a Mechanic’s Lien Help?
Very simply put, a lien is a legal type of form that you file in civil court, a registrar office, the DMV or any other type of entity where properties are recorded. Depending on the service you provided, you will need to go to the correct type of entity. Once you have placed your lien on a property, the owner of that property is no longer able to sell it until the balance has been cleared. Various types of businesses are able to file liens, including:
- Car mechanics
- A plumber
- A painter
- An electrician
- A landscaper
- Any other type of tradesman or professional that delivers a certain type of service directly on a property.
Once the lien is in place, the property can only be sold if the owner pays the property. In extreme cases, the holder of the lien can force the owner to sell their property in order to pay the balance due to them.
How to File a Lien
It can be quite tricky to file a lien properly. This is also because every locality will have their own rules and regulations. Regardless of where you live, however, you will need to complete a number of very specific forms and you will need to make sure these are filed correctly and on time. As such, if you are a tradesman, it is always a good idea to be aware of your local lien filing procedures, so that you can act properly and on time should the need arise. In some cities, you will need to actually go to court in order to file a lien. In other places, you can have a hearing in front of a clerk. Sometimes, the forms are free to obtain and file, whereas other localities charge fees. It may also be possible to find the forms online, but then it is doubly important that you actually check they are the correct ones. A simple mistake may render your lien invalid.
Certain fees can usually also be attached to the lien, above and beyond the costs of your original job. This includes court fees for filing the lien, attorney fees, collection fees and more. This is why you must have detailed copies of any correspondence between yourself and the client, so that you can claim any expenses, down to a stamp, back on your lien.