The mechanic’s lien is one of the most powerful tools that a contractor can employ when dealing with an owner that is bankrupt or refuses to pay for a construction project. All it takes is a single stalled project for a contractor to face potential bankruptcy. Contractors must be familiar with the lien laws of their state. Unfortunately, these laws vary, sometimes drastically, from state to state.
For the above reasons, the Birmingham construction lawyers at Cotney Construction Law will be detailing the two types of mechanic’s liens in Alabama, the Unpaid Balance lien and the Full Price lien, and how to file them. A Full Price lien provides far greater utility than an Unpaid Balance lien. Consult with a Birmingham construction lawyer to confirm if you are entitled to a Full Price lien.
If you did not contract directly with the owner of a project, you must send a Notice of Unpaid Lien to the owner before filing a lien. Then a Notice to Owner must be sent by certified mail to the owner (or their agent) and anyone above you in the contracting chain. The Notice to Owner must be sent prior to work being performed on a project in order for a subcontractor to have access to the Full Price lien.
Unpaid Balance Lien
Alabama law does not require that a Notice to Owner be sent; however, failure to do so will lead to a contractor only being able to file an Unpaid Balance Lien. Be aware, an Unpaid Balance lien can only apply to the money that an owner has on them at the time that they receive the Notice of Unpaid Lien. This means that a mechanic’s lien may be useless if an owner has already paid their general contractors.
Even with the aid that this two-part series provides, the lien process in Alabama is still a complex endeavor that should not be undertaken alone. Consult with one of our Birmingham construction lawyers to ensure that a Notice to Owner is submitted properly and timely so that you have access to the Full Price lien.
For information on Full Price liens and filing a mechanic’s lien in Alabama, please read part two.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.