Understanding Mechanic’s Liens

Have you been contracted to perform work on real estate and not been paid? You may be able to file a mechanic’s lien to try and secure compensation.

A mechanic’s lien is a statutory right that protects contractors, subcontractors, mechanics, suppliers, laborers, and others from non-payment of work performed or materials furnished on a house, mill, factory, building, bridge, or other structure. Ind. Code § 32-28-3-1. The core function of a mechanic’s lien is to provide contractors with a mechanism to obtain compensation for their services after they have increased the value of a property owner’s land.

This means that a contractor has a right to file a lien against the structure that the contractor rendered services, furnished materials, or furnished machinery on, for the value of the labor or the materials furnished. The contractor also has the option to file a lien against the parcel of real estate under which the home or building resides on. Under certain circumstances, a court rendering judgment pursuant to a mechanic’s lien can order the sale of the property subject to the lien.

Notwithstanding the foregoing, Indiana requires a potential lien holder to follow specific notice and filing deadlines in order to potentially secure a mechanic’s lien. As such, a contractor must be diligent in pursuing his or her lien rights after labor and/or materials have been provided. Finally, an action to foreclose on a mechanic’s lien must be initiated within the earlier of one year from the date the lien was originally recorded or 30 days after the owner of the property subject to the mechanic’s lien has provided written notice to the lienholder to file a lawsuit to foreclose on the lien.

Call us at (317) 825-5110 to discuss any questions you may have. McNeelyLaw has a team of experienced attorneys ready to help you.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.