A material supplier who sells merchandise or provides labor to a contractor for the improvement of an existing single family, owner-occupied residence is acting as a subcontractor. Under this situation, all four of the following steps should be taken to preserve your lien rights.
60 Day Notice
You must give the owner written notice that you have furnished labor or material for his home improvement within 60 days of starting your work or after the first delivery of supplies (Note the 60 day notice does not apply to new construction).
This notice must include: (a) the subcontractor’s or material persons’ name and address, (b) the date on which the subcontractor began to work or to deliver supplies, (c) what was done or to be done, (d) a description of the supplies delivered or to be delivered and (e) the contractor’s name who requested the work. Additionally, the following warning, set out in BOLD PRINT must accompany this notice:
NOTICE TO OWNER
THE SUBCONTRACTOR PROVIDING THIS NOTICE HAS PERFORMED WORK FOR OR DELIVERED MATERIAL TO YOUR HOME IMPROVEMENT CONTRACTOR. THESE SERVICES OR MATERIALS ARE BEING USED IN THE IMPROVEMENT OF YOUR RESIDENCE AND ENTITLE THE SUBCONTRACTOR TO FILE A LIEN AGAINST YOUR RESIDENCE IF THE LABOR, SERVICES, MATERIAL, FIXTURES, APPARATUS OR MACHINERY, FORMS OR FORM WORK ARE NOT PAID FOR BY YOUR HOME IMPROVEMENT CONTRACTOR. A LIEN WAIVER WILL BE PROVIDED TO YOUR CONTRACTOR WHEN THE SUBCONTRACTOR IS PAID, AND YOU ARE URGED TO REQUEST THIS WAIVER FROM YOUR CONTRACTOR WHEN PAYING FOR YOUR HOME IMPROVEMENTS.
NOTE: Where you are uncertain whether the project involves an existing, owner-occupied, single family residence, be safe and send the notice. If you fail to provide the homeowner the 60 day notice your lien rights be in jeopardy.
EXCEPTION: If you sent the notice late (after 60 days from FIRST furnishing materials and labor), your lien rights might be preserved, but only to amount of monies not yet paid to the Contractor by the Owner.
90 Day Notice of Lien
You must also give the owner and his lender written notice of your claim for a mechanic’s lien within 90 days (not 3 months) after completing the work or from the last day materials were delivered to the job site. To locate the lender’s name, you may need to go to the Recorder’s Office and search the public records. Both the 60 and 90 day notices must be personally served (personally handing the written notice to the owner) or sent by certified or registered mail, return receipt requested with delivery limited to the name of owner or his agent, or architect, or the superintendent in charge of the project. If served by mail (addressing the notice to “occupant” is insufficient), the notice is deemed served when deposited in the mailbox. The 60 and 90 day notices must state the name of the owner, the contractor, a description of the work furnished, the property in question and the amount due.
By doing this, you will notify the owner of your lien in the event the Contractor failed to list you in his affidavit and will place the legal duty on the owner to withhold payment to the contractor in the amount of your lien.
NOTE: Serving the 90 day Notice of Lien may be excused if you are listed in the Contractor’s Statement but your lien claim will be limited to the amount indicated in the Contractor’s Statement. The Notice may also be excused if you cannot locate the owner (or his agent) because he is a non-resident or, after reasonable diligence, cannot locate him in the county. In that situation, you must file your notice in the Recorder’s Office. If the property is held in joint tenancy, the notice must be served on each owner; service on only one of the joint tenants will bind only his interest. and
File Claim For A Lien Within 4 Months
If after serving the 60 day and 90 day notices you still have not been paid by the owner or contractor, you must then file a claim for a mechanic’s lien within four months (not 120 days) of the last delivery of materials or last day of work on the job.
The subcontractor’s claim for a lien must be verified and contain a brief statement of the subcontract, a statement as to whether the subcontract is oral or written, the date of the subcontract, a description of the kind of work done, a statement as to the amounts paid and the amount currently due and the specific amount for which a lien claim is being made, and a legal description of the property to which the lien applies.
File Suit
If the lien notices were properly served and the claim for a lien properly recorded, you must file a lawsuit to foreclose a mechanics’ lien claim (i.e., to force the sale of the improved property to satisfy your lien) against the owner and the general contractor within 2 years from completing the work or from the last delivery of materials, and you should include all necessary parties such as other lien holders.
By doing all of the above, you can successfully assert a lien against both the original owner as well as any new owners or other third persons.