Indiana Mechanics Lien
Indiana's Mechanic Lien statute is technical and difficult to digest. The following information is a simplified explanation of the Mechanics Lien Statute codified at I.C. 32-28-1 et seq. For experienced advice, please contact a construction attorney.
WHAT IS A MECHANICS LIEN
In Indiana certain persons and entities acquire lien rights once they provide labor, materials or equipment on a private construction project. No such mechanics lien right accrues to those persons or entities providing labor, materials or equipment on a public construction project.
HOW DOES IT WORK?
Generally speaking, a Mechanics Lien provides the holder with the right to file a lawsuit against the property (in rem) where the labor, materials or equipment were provided. Once the holder of the mechanic lien obtains a judgment, then the holder is entitled to have the property sold by the Sheriff to satisfy the underlying unpaid debt and recover reasonable attorney fees in the process.
HOWEVER! MECHANICS LIENS ARE WORTHLESS UNLESS PERFECTED
PERFECTING A MECHANICS LIEN is either a ONE (1) or TWO (2) step process. It's a two step process if:
A) NO PRIVITY WITH OWNER
The holder of the lien is not in PRIVITY with the property owner. (This is generally the case when the contractor or supplier are hired by someone other than the property owner), and
B) CLASS 2 PROPERTY
The property, where the construction related project is or will be performed, is an owner occupied single or double unit residential property (CLASS 2 Property).
PERFECTING A LIEN WITH THE TWO STEP PROCESS
STEP 1: SEND PRE-LIEN NOTICE:
Within thirty (30) days of the first day the contractor or supplier supplies labor, materials or equipment on the job site, the contractor or supplier must serve the property owners with written notice that the contractor has supplied labor, materials or equipment for the owner's project and that the contractor or supplier has lien rights.
STEP 2: FILE NOTICE WITH COUNTY RECORDER:
Within sixty (60) days of the last day the contractor or supplier provided labor, materials or equipment on the job site, the contractor or supplier must file a NOTICE OF INTENTION TO HOLD A MECHANICS LIEN with the Recorder's Office of the county where the project is located.
PERFECTING THE LIEN WITH THE ONE STEP PROCESS:
The one (1) step process only applies to:
(A) CONTRACTORS AND SUPPLIERS IN PRIVITY WITH OWNER
Contractors and Suppliers who are in PRIVITY with the property owners
Regardless of whether the project is a Class 2 property, commercial or industrial.
(B) COMMERCIAL OR INDUSTRIAL PROJECT
Contractors and Suppliers providing labor, materials or equipment on a commercial or industrial construction project, regardless of PRIVITY.
If a Contractor or Supplier falls into either (A) or (B) above, then the contractor must simply file the NOTICE OF INTENTION TO HOLD A MECHANICS LIEN with the Recorder's office of the county where the property is located.
TIME FOR FILING: The Contractor or Supplier must file the NOTICE OF INTENTION TO HOLD A MECHANICS LIEN within:
60 DAYS of the last day labor, materials or equipment was supplied on the construction project, if the project concerns an owner occupied, single or double unit residential property (CLASS 2).
90 DAYS of the last day labor, materials or equipment was supplied on the construction project, if the project is commercial or industrial.
AFTER THE LIEN IS PERFECTED:
DEADLINE TO FILE SUIT:
Once the lien is perfected, the lien holder has up to ONE (1) YEAR from recording date of the notice to file a lawsuit to foreclose on the Mechanic Lien. Failure to file within one year will render the lien void.
Note: There are many nuances to this somewhat complex area of law. If you have a mechanic lien that needs to be filed or foreclosed on, contact an experienced attorney to assist you in this matter.
A more detailed description of each type of Construction Law issue can be found through the links below:
Warranty & Title Issues
Indiana Home Improvement Act
When these difficult issues arise, you need an experienced construction attorney to help guide you through the maze of legal procedures necessitated by mechanics lien rules and regulations. Call us at McNevin and Schiff. We know the mechanics lien and construction lien maze and we know how to guide you through it with comfort and speed.
For a telephone evaluation – call – 1-800-653-1790 or click here to send us an email.
If you are located in the central Indiana area and need a construction attorney, call McNevin & Schiff, we serve the central Indiana area, including the communities of Indianapolis, Beech Grove, Speedway, Carmel, Noblesville, Fishers, Geist, Oaklandon, Greenfield , Greenwood, Whiteland, Mooresville, Plainfield, Brownsburg and Zionsville.
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