When you don’t get paid for work that you have done and if the job is connected to real estate, you may wish to consider the filing a mechanic’s lien. Maine Revised Statutes 10 section 3251. Mechanic’s liens are used to secure an interest in and against real estate. The lien itself encumbers title, and will prevent sale or refinance, provided statutory procedure is strictly adhered. The release of the filer of the mechanic’s lien is necessary and usually means you get paid. So the mechanic’s Lien is an effective tool in debt collection, if used correctly.
Mechanic’s liens are used by trade contractors when they are not paid for a service that improves a property. For example, an electrician or painter who works as a subcontractor and is not paid may be able to secure the money owned to them with a mechanic’s lien. While not all services are eligible, Maine statute allows a broad list of services. Generally there has to be a service provided that attaches to the realty and improvement that enhances the value. Maine is one of the few states that allows for maintenance of real estate to add value. So yes, eligible services may include the landscaper who cuts the grass and plows snow, or even a cleaning service. Maintenance maintains value and thereby adds value so oil, gas and wood to keep the boiler on and prevents pipes from freezing can be considered.
You have a limited time after you provide your service to file a mechanic’s lien.
As a subcontractor, not working directly for the owner, the notice of lien must be filed within 90 days (from last date of service). The notice is filed on the land records with the Registry of Deeds in the county where the subject property is located. You are required to send a copy of the lien to the property owner as well as the general contractor. To enforce the lien, an action in court must be filed within 30 days of the notice of lien. In other words, within 120 days of the last date of service. Simply filing the lien is not enough, you must file a court action within 120 days or your lien will be deemed inoperable as an operation of law, worthless as a collection tool.
This failure will not prohibit you from taking other collection actions, provided you operate under the statute of limitations, which is 6 years in Maine. The 90 period is a prohibition for the filing of a mechanic’s lien only.
As a general contractor the lien is considered perfected with the filing of the court action, within 120 days of the last date of service. Once the litigation is initiated, the party filing lien must file notice on the land records of the pending action.
Do your homework beforehand, and check to see which liens are ahead of you. It costs money to file a lien, and the last thing you want to do is waste your money attaching a lien to an asset that is already so encumbered that your lien becomes worthless.
Another important thing to consider, especially for those working with consumers, is the importance of a solid contract upfront that has the appropriate language to protect you. . Ask your attorney to check your contract today and save yourself trouble later.