Any contractor that adds value to a piece of property through his work is entitled to a lien on that property, if the contractor follows the Mechanic’s Lien statutes. Under certain circumstances, design professionals, such as engineers, architects and surveyors are also entitled to put a lien on the property.

Any material supplier whose products add value to a piece of property is also entitled to put a lien on that property, if the supplier follows the statutes.

It is a complicated process. Persons not familiar with the process should contact an attorney or a lien service company. Some larger companies handle the process in-house. In general, however, it all begins with filing a Preliminary 20-day Lien Notice. This puts the world on notice that you may be filing a lien on the property for your work or materials. If you have not been paid after the completion of the work, you need to record a lien in the appropriate County Recorder’s office within a statutorily-prescribed period of time.

In the event you are not paid for your work or materials, you are entitled to seek foreclosure of the property and take your payment out of the proceeds of the property. The lien may also assist you in protecting your rights if the owner or general contractor files for bankruptcy.

First, an owner needs to be aware of the restrictions on placing a lien on the property. There are several restrictions on a contractor’s ability to place a lien on the property. If you think someone has improperly placed a lien on your property, contact an attorney.

Second, an owner needs to watch his money. If the owner pays its general contractor, but the general contractor does not pay the subcontractors or suppliers, the subcontractors and suppliers may still place a lien on the property. This could result in the owner paying for the same work twice. There are ways to safeguard against this result, and if you have questions you should contact an attorney.

Within 180 days of recording a lien, it must be acted upon by filing a foreclosure lawsuit in court. If you miss this deadline, your lien is worthless. In this lawsuit, you will ask the court to establish the value or your lien (the value added to the property) and seek a foreclosure and sale of the property. Payment will be made out of the proceeds of the sale.

Filing liens and contesting liens is a very tricky venture. The statutes and deadlines require strict compliance. Most lien service companies are knowledgeable in this regard and can assist in getting the proper paperwork filed and recorded. However, not everything is clear and attorneys often need to get involved in this phase. After it is apparent that there is a payment dispute, you should contact an attorney to evaluate your legal rights, remedies and defenses.