What is a Mechanic’s Lien?
A mechanic’s lien is a document that is filed at the courthouse by a contractor who has not been paid for work performed on the property. The lien is similar to a mortgage or other lien in that it can be foreclosed upon, which means that the mechanic could go to court to have the home sold to satisfy the debt; however, it usually does not get this far.
Does a Mechanic’s Lien Prevent the Sale of a Home?
Like many things in the law, this is not a black and white answer. The lien itself does not prevent the sale of a home or other property. With that being said, if the property is sold it is sold “subject to the lien,” which means that the lien will continue to affect the property even after the sale. In other words, the contractor would still have the right to foreclose on the property even after the sale. As such, from a practical sense, many buyers do not want to purchase a home with a lien, and therefore, it effectively prevents the sale of the home. Moreover, many (if not all) title companies, will not issue title insurance on a property with a mechanic’s lien (without an exception for the lien) and lenders will not close on a property with a lien, both of which also practically prevent many sales from closing.
Is an Attorney Required to File a Mechanic’s Lien?
No. Although Kansas and Missouri law both require an entity (LLC, Corporation, etc) to retain counsel when appearing in court, this rule is not usually applied to mechanic’s liens. Therefore, a contractor may personally file the lien at the courthouse. With that being said, an attorney is usually advisable when it comes time to foreclose upon the lien if the property owner has not paid to release the lien from the record.
When Would a Mechanic’s Lien Not Be Valid?
First, if the lien does not comply with the rules related to the form and substance of the lien, it may not be valid. These requirements include itemizing the basis for the charges and properly identifying the property. Next, if the contractor did not follow any of the pre-lien notice requirements, the lien may not be valid. Finally, a lien is only valid for a short period of time — six months in Kansas and one year in Missouri — after this time, the lien is no longer effective if a foreclosure action is not filed within this timeframe.
How Much Does it Cost to File a Mechanic’s Lien?
If done themselves, the only cost to a contractor for filing a lien is the filing fees with the court, which are generally under $100. If a foreclosure action is necessary, the costs will be equivalent to other litigation for the collection of a debt and will depend on many factors, including if the property owner responds to the action and/or if any counterclaims are filed.
What is the Liability for Filing a False Lien?
If a contractor files a lien in good faith, but that lien is later found to be invalid (e.g., when there is a dispute over the amount owed), there is no penalty to a contractor for filing the lien. On the other hand, if a person files a lien in bad faith (e.g., when no money is owed or there is no basis for the lien), the person has committed “slander of title” and may be liable to the property owner for damages, including attorney fees.
How Do You Remove an Invalid Mechanic’s Lien From a Property?
If the property is located in Kansas and the lien is truly invalid (e.g., the person filing the lien never did work on that property), there is an expedited court process for hearing these claims and removing the lien. In all other instances, including when there is a dispute about the amounts owed, the process of removing a lien requires the filing of a “quiet title” action, which is a suit to remove the lien from the property. The homeowner may include claims for “slander of title” or other claims related to the quality of the work in this action.