Anaya Nolan
A common law lien is a legal recourse in some states that allows a claimant to place a lien on the real or personal property of the owner, provided that the claim doesn't fall under any of the three categories: statutory, security interest, or judicial. This legal instrument allows the claimant to pursue and collect on a debt if the owner has failed to pay for services rendered or work performed. To initiate the process, one must file a statement of Intent to Record a Common Law Lien with the county recorder where the property is located, including details such as the property owner's information, the address, and the amount of the claimed debt. This must be done within 60 days of the last service provided. It's important to understand the filing deadlines and potential risks, as the property owner may sue for damages and attorney fees if they can demonstrate harm.
| Characteristics | Values |
|---|---|
| What is it? | A legal recourse in some states that allows a claimant to place a lien on real or personal property of the owner, provided that the claim doesn't fall under any of three categories: statutory, security interest, or judicial. |
| Who can use it? | Anyone except against the property of public officials due to nonperformance of public duties. |
| Who is it for? | The lien holder/claimant who can pursue and collect on a debt. |
| Where to file? | File with the county recorder in the county where the real or personal property is located. |
| When to file? | Within 60 days of the date you last performed work or provided service. |
| What to include? | Information on the property owner, the address and description of the property's physical location, and the amount of the debt claimed. |
| What if there's an agreement? | File a Certificate of Satisfaction to release the lien against the property. |
| What if you want to challenge the lien holder's claim? | Send a Notice of Request to Commence Suit within 30 days by registered or certified mail. |
| What if the lien holder doesn't file suit? | File an affidavit of service with the county recorder to request the release of the lien after 30 days. |
| What are the risks? | If the property owner can show damages, they can sue for the amount of damages and reasonable attorney fees. |
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What You'll Learn
Understand the claim type
Understanding the claim type is a crucial step in the process of filing a common law lien. A common law lien is a legal recourse in some states that allows a claimant to place a lien on the real or personal property of the owner, provided that the claim does not fall under any of the three excluded categories: statutory, security interest, or judicial.
The purpose of a common law lien is to enable the lien holder to collect on a debt owed to them. It gives the lien holder the right to retain the property until the debt is paid in full. It's important to note that a common-law lien only provides a passive right to retain the property and does not include the power to sell it. This is in contrast to some other types of liens, such as a statutory lien, which may confer additional rights or powers.
There are different types of common law liens, including special liens and general liens. A special lien is the more common type and requires a close connection between the property and the service rendered. It can only be exercised for fees directly related to the specific transaction and cannot be used as security for past debts. On the other hand, a general lien affects all of the property of the lienee in the possession of the lienor and serves as security for all debts owed by the lienee to the lienor.
Another type of lien is the maritime lien, which is specific to Admiralty law. It constitutes a security interest upon ships and arises purely by operation of law. It is often given priority over other forms of registered security interests. Additionally, in common law countries, there is the concept of an equitable lien, which is a non-possessory security right conferred by operation of law. It is similar in effect to an equitable charge but differs in that it is non-consensual and arises in limited circumstances, such as in the sale of land where an unpaid vendor has an equitable lien over the land.
It is important to note that there are restrictions on placing common law liens. For example, common law liens cannot be placed against the property of public officials due to non-performance of public duties. Additionally, there are specific filing deadlines and requirements that must be adhered to when filing a common law lien. Failure to comply with these deadlines or understand the limitations of your claim type can result in legal consequences, including the risk of being sued by the property owner for damages and reasonable attorney fees.
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![A treatise on the law of liens, common law, statutory, equitable, and maritime / by Leonard A. Jones Volume v. 2 1888 [Leather Bound]](https://m.media-amazon.com/images/I/81HiC2Oig0L._AC_UY218_.jpg)
![A treatise on the law of liens, common law, statutory, equitable, and maritime / by Leonard A. Jones Volume v. 1 1888 [Leather Bound]](https://m.media-amazon.com/images/I/61kelb6mFML._AC_UY218_.jpg)
File a statement of intent
A common law lien is a legal instrument that allows a claimant to place a lien on the real or personal property of the owner, provided that the claim doesn't fall under any of the following three categories: statutory, security interest, or judicial. The lien allows the claimant to pursue and collect on a debt if the owner has failed to pay for services rendered or work performed.
To initiate the process of filing a common law lien, you must first file a "Statement of Intent to Record a Common Law Lien" with the appropriate county recorder. This statement serves as a formal declaration of your intention to place a lien on the property owner's assets. Here are the essential steps and considerations for filing the Statement of Intent:
- County Recorder's Office: Locate the county recorder's office in the county where the real or personal property of the owner is situated. This is the designated office where you will file your Statement of Intent.
- Timing and Deadlines: Be mindful of the timing requirements. In most cases, you must file the Statement of Intent within 60 days from the date you last performed work or provided services to the property owner. This timeframe may vary depending on the state and the nature of the project (residential or non-residential). It's crucial to understand the specific deadlines for your state to ensure your lien rights are preserved.
- Content of the Statement: The Statement of Intent must include specific information, such as the property owner's name or entity, the physical address and description of the property in question, and the amount of debt claimed to be owed. Ensure that you provide accurate and detailed information to support your claim.
- Notice of Intent to Lien (NOI): Before filing the Statement of Intent, consider sending a Notice of Intent to Lien to the property owner and, in some cases, the prime contractor or other relevant parties. While this step is legally required in only a few states (such as Texas), it can be highly effective in prompting payment and resolving disputes without escalating to a full lien claim. An NOI typically warns the recipient(s) that a lien may be filed unless payment is made within a specified period, often around 10 to 30 days.
- Understanding Deadlines and Consequences: It is essential to understand the filing deadlines and potential consequences of missing them. If you do not file the necessary forms within the specified timeframe, you may lose your lien rights and weaken your position in recovering payment. In some cases, the property owner may even be able to sue you for damages and reasonable attorney fees if they can demonstrate that they suffered damages due to your lien filing.
- Keep Records: Maintain copies of all relevant documents, including the Statement of Intent, notices sent, and any other supporting records. These records will be important if there are disputes or if you need to take further legal action.
By following these steps and considerations, you can effectively file a "Statement of Intent to Record a Common Law Lien," which is the initial step in the process of securing your rights and pursuing debt collection through a common law lien.
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Know the filing deadlines
When filing a common-law lien, it is crucial to understand the deadlines and not allow too much time to pass before filing the necessary forms. A satisfactory judgment defaults to the defendant in many cases. If the property owner can show that they suffered damages due to the lien, they may sue the lien holder for the amount of the damages and reasonable attorney fees.
In Texas, contractors, subcontractors, and suppliers must adhere to specific deadlines to file a lien and protect their rights to payment for services rendered or materials supplied. For residential projects, the deadline for contractors to file a lien is the 15th day of the third month following the completion of the work. For example, if the work is finished in January, the deadline to file a lien is April 15. Subcontractors and suppliers should be aware of the pre-lien notice requirements, which typically involve providing written notice to the property owner by the 15th day of the second month after the work is completed. Additionally, Texas has specific deadlines for different types of construction projects under the Prompt Payment Act. Subcontractors on private construction projects must pay their subs and suppliers within 7 days of receiving payment, while subcontractors on public construction projects have 10 days to make payments.
In Florida, subcontractors, sub-subcontractors, and material suppliers have a 90-day deadline to file a claim of lien from the final date that labour, services, or materials were supplied. They must then serve the claim of lien on the property owner within 15 days of recording it. The deadline to file a lien enforcement action is one year from the date the claim of lien was recorded. If the owner files a notice of intent to contest the lien, the deadline to respond is shortened to 60 days. If the owner files a notice to show cause for why the lien should not be enforced, the deadline to respond to the show cause complaint is 20 days.
When filing a common law lien, it is important to note that the deadlines may vary depending on the state and the specific circumstances of the case. It is always advisable to seek legal advice or consult with a qualified professional to ensure compliance with the applicable laws and deadlines.
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Settle the debt
A common law lien is a legal recourse in some states that allows a claimant to place a lien on the real or personal property of the owner, provided that the claim doesn't fall under three categories: statutory, security interest, or judicial. The lien allows the claimant to pursue and collect on a debt by attaching a claim to the property if the owner has failed to pay for services rendered or work performed.
If you are the claimant, to settle the debt, you must file a statement of Intent to Record a Common Law Lien against the owner's property with the county recorder in the county where the property is located. This statement must include information on the property owner, the address and description of the property's physical location, and the amount of the debt claimed. This must be filed within 60 days of the date you last performed work or provided service.
If you are the property owner, you may make an offer to settle the amount for less than you owe. As part of the negotiations, get the creditor to release the lien. You can also hire a debt settlement lawyer to help you with the negotiations. If you think the creditor obtained the lien through fraud, bad faith, coercion, or other wrongful means, you might be able to win a lawsuit against the lienor. If you agree that you owe the lien holder a debt, contact them to try to negotiate a settlement.
Once an agreement about settling the debt is reached, the claimant must file a Certificate of Satisfaction. This releases the lien against the property and should be recorded with the same county recorder where the statement of Intent to Record a Common Law Lien was filed.
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Challenge the claim
If a common law lien has been filed against your property, you have the right to challenge or defend against the lien. Here are some steps you can take to challenge the claim:
Negotiate with the claimant
The first step to challenging a lien is to negotiate with the claimant, or contractor, who filed it. This is often the quickest and easiest way to resolve the issue. Contractors would often rather negotiate a payment than get bogged down in liens and litigation, which are time-consuming. Be creative with your negotiation strategy. For example, you could offer to pay a lower amount in exchange for a quick payment, or payment over several months. Alternatively, the contractor may agree to do some extra work or make changes to the existing work in exchange for payment. Once a settlement is reached, it is usually quick and easy for the contractor to release the lien.
Check licensing and registration
Showing that the holder of the lien is not licensed or registered will be enough to have the lien released. Each state has different requirements for licensing and registration, so be sure to check the specific laws in your state. For example, in some states, you may be required to file a Notice of Commencement with your county's real estate records, which requires anyone providing labour or materials to send you a notice. If they fail to send this notice, they could lose their right to file a lien.
Dispute the lien
If negotiation fails, you can choose to dispute the lien. This can be done through statutorily provided preliminary means, a demand to/against the claimant, or a full-blown lawsuit. You can also force the claimant to file a lawsuit to enforce the lien in a shorter period, if this option is available in your state. For example, in Pennsylvania, an owner is allowed to file "preliminary objections" to the lien claim with the court.
Challenge procedural and technical errors
In most states, a challenge in court of an improper lien will consider only procedural or technical errors with the lien, and not necessarily whether the parties performed under the contract. This means that the court will be concerned with whether lien notices were sent and whether the contents of the lien are technically correct.
Challenge the quality of work
If the contractor has violated the contract by providing dissatisfactory work, you can contest the lien by showing that the work didn't satisfy the contract. This can be done by taking the contractor to court and arguing a breach of contract or other dispute issues. If you win this litigation, the court can order that the lien be removed from the property record.
File a Notice of Contest
If you believe the lien was filed in error, you can file a Notice of Contest with the county real estate records. This requires the person who filed the lien to file a lawsuit against the party that owes them money within a certain timeframe (usually 60 days). If they do not start a lawsuit within this timeframe, the lien will automatically expire and will no longer be part of the public record.
Remember, the laws regarding common law liens vary from state to state, so be sure to review the specific lien law statutes in your state.
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Frequently asked questions
A common law lien is a legal recourse in some states that allows the claimant to place a lien on the property of the owner, provided that the claim doesn't fall under any of the following categories: statutory, security interest, or judicial. The lien holder can attach a claim to the property if the owner has failed to pay for services rendered or work performed.
To file a common law lien, you need to file a "Statement of Intent to Record a Common Law Lien" with the county recorder in the county where the property is located. This statement must include information on the property owner, the address and description of the property's location, and the amount of debt claimed. The filing must be done within 60 days of the date you last performed work or provided service.
If you reach an agreement with the property owner to settle the debt, you need to file a "Certificate of Satisfaction" with the same county recorder where you filed the Statement of Intent. This certificate releases the lien against the property.
