A mechanic’s lien may lead to real estate litigation

On Behalf of | Apr 26, 2021 | Real estate litigation |

As is the case in other states, Ohio law allows contractors and subcontractors to record and then enforce a mechanic’s lien on property on which they perform work.

The idea behind the mechanic’s lien statute is to make sure that those in the construction industry get paid for their work.

Without the protection of a mechanic’s lien, it is much easier for a landowner, or general contractor, to refuse to pay all or part of a bill even if the charges are fair and legal.

Contractors may foreclose mechanic’s liens in order to collect payment

The laws surrounding mechanic’s liens in Ohio are complicated. Furthermore, they include a lot of strict deadlines and requirements. If these details get missed at any step of the process, it can affect a party’s legal rights significantly.

Basically, if a contractor has a valid mechanic’s lien, then the contractor may file a lawsuit to foreclose it. As with other foreclosures, the end result is the property gets sold at an auction, and the contractor may be entitled to the proceeds as allowed by Ohio law.

This is true even if the landowner never hired the contractor and never owed the contractor money.

Mechanic’s liens frequently lead to contested real estate litigation

Not surprisingly, mechanic’s liens often set off contested real estate litigation. For example, a landowner may allege that the lien is invalid or the enforcement of it is improper or untimely.

Especially in larger real estate projects, there also can be significant conflict about who is ultimately responsible to pay off the lien or whether the contractor who holds the lien will ultimately receive any of the proceeds.

If a resident of the Toledo area has specific questions about mechanic’s liens, they should ask an experienced real estate attorney.