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Lien on Me: The Benefits and Burdens of Construction Liens

Construction liens can be a colossal headache if you discover that a lien has been registered against your property.

Typically, a construction lien is registered by a person or company who has supplied materials or services to a construction job and asserts that they have not been paid for the materials or services supplied.

Practically, this means that if you were building your dream home and relying on mortgage money to finance the project, the mortgage money would stop dead until the lien was lifted. Similarly, trying to sell a property subject to a lien is next to impossible as the lien runs with the land and becomes the problem of any subsequent owner.

Some people in the construction industry slap liens on job sites without considering the law. Moreover, property owners often respond to the liens as if there was an automatic right to have the lien tie up their property.

The fact is, legally, construction liens are considered an extraordinary remedy. There is no absolute right to throw a lien on a property. The registration of a construction lien is a privilege, not a right.

Certain precise conditions of fact and TIME must be met, failing which a judge has the power to vacate and or discharge the lien on motion, without a full hearing of the claim giving rise to the lien. An improperly placed lien can result in significant damages against the contractor/subcontractor once the lien is lifted and could moreover preclude the contractor/subcontractor from the appropriate protection in the event their account was unpaid for no good reason.

If a lien is placed on your property it may be that a simple application to court can have it removed rather than the time consuming and expensive process of an all-out trial.

Also, if you are thinking about placing a lien on a property, it is important that it be done in a timely fashion and in a way that complies with the legislation. Time is your big enemy when considering a construction lien.

Lesson to be learned?

Construction liens are complex and fraught with pitfalls if undertaken by inexperienced parties. If one isn't absolutely sure of the steps, timing and tests required to be met in registering a lien, the best advice is to get advice!

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