If you’re a contractor, laborer, or materials supplier working on a construction project in Ohio, you’ll probably need to know the basics of how mechanics liens work. Like every state, Ohio has its own mechanics lien laws you have to follow in order to preserve your rights when a property owner or contractor neglects to pay you.
You probably know that in Ohio, lien filings are generally due within 60-75 days of furnishing labor or materials. These are the dates you should be tracking. Here are five more things about mechanics lien in Ohio you may not know.
Ohio Has Unique Notice Requirements. There are several notices you must know about to avoid losing your right to file a mechanics lien. First is the Notice of Commencement which is filed by the property owner. If filed, you must serve a Notice of Furnishing to the owner within 21 days of the start of your work or furnishing of materials or you lose your right to file a lien. Next is the Notice to Commence Suit which is also filed by the property owner. This forces you to file a lawsuit to enforce your lien within 60 days of receiving notice of the filing or lien become invalid. If a Notice to Commence Suit is not filed, you have 6 years from your filing to enforce your lien. In addition to these unique liens, there is your typical Notice of Lien which must be served on the owner property within 30 days from when you filed your lien.
- Lien Deadlines Depend on the Project: For a residential project, which includes 1-2 family dwellings and residential condominiums, you have just 60 days to file your mechanics lien. For most other projects including commercial buildings, industrial projects, and other private works, the deadline is 75 days after the date you furnished materials or labor. However, for liens on oil and gas wells, you have 120 days instead of just 75.
- Filing Early on Residential Property is Smart: For mechanics lien in Ohio on residences, you would be smart to file early. If you’re working as a subcontractor on a project and the general contractor is paid by the property owner before the owner receives notice of your lien, then your lien will not attach to the property.
- No Interest or Attorney’s Fees: While it often makes sense to hire an attorney to streamline the lien filing and collection process, Ohio law does not allow lien claimants to collect interest or attorney’s fees on their liens. You might, however, collect attorney’s fees if you have to go through a foreclosure proceeding to collect.
- Make Sure Your Lien is Right: Before you file your lien, call the county’s registrar of deeds office to find out the filing fee and any formatting preferences they have. In Ohio, your lien must include an affidavit that is signed by a notary public. Your attorney will have one on staff and many banks have them as well. Your lien affidavit must accurately state the owed amount; a description of the property to be liened; name and address of the person you worked for or provide materials to; the name and address of the owner; your name and address, and; the first and last dates you supplied services or materials.
- Know Your Priority: In the event you have to prosecute a lien through a foreclosure, up to 6 years after filing if a Notice of Commence Suit is not filed, you need to understand where you stand in regards to being paid. Generally, a mortgage holder who recorded prior to your lien will be a higher priority claim and you will only be paid once they are satisfied. When there are multiple liens on a piece of property, liens of laborers are given priority and then the remaining liens are treated equally.
While filing a mechanics lien in Ohio can seem like a straightforward process, there are often little details that can cause you to lose your right to collect payment. Be sure you follow the necessary Ohio mechanics lien laws and, if you think you need help tracking your liens or dealing with nuances, give the attorneys at National Lien & Bond a call.
