Legal-Ease: Two types of mechanics’ liens


LEGAL-EASE

By Lee R. Schroeder - Contributing Columnist



Lee R. Schroeder

Lee R. Schroeder


When people ask me about mechanics’ liens, I always have to ask for more details. There are two types of mechanics’ liens in Ohio, and they are not related to each other in any way, even though they share the same name.

Traditionally, people think of mechanics as the people who work on motor vehicles. Sometimes, these mechanics can keep possession of a vehicle upon which repairs were made, if the repairs are not paid for. This is a traditional mechanics’ lien. There is no filing or formal process for this lien to be used. The mechanic’s power to retain the vehicle is the lien.

The vehicle’s owner can sue to ask a court to order the mechanic to release the vehicle. At that time, the mechanic can formally assert the lien in the context of the court proceedings.

There are limits on traditional mechanics’ liens. Traditional mechanics’ liens cannot exist if the mechanic did not follow various unrelated laws before or during the repairs. For example, if a vehicle repair is expected to exceed $50, the mechanic must make certain disclosures to the owner in writing. If a mechanic fails to make the disclosures, the mechanic cannot assert a traditional mechanics’ lien (keep the car until paid).

The other type of mechanics’ lien in Ohio is a lien for labor or materials provided to a building or improvement project on real estate. This type of mechanics’ lien is sometimes called a real estate mechanics’ lien. Real estate mechanics’ liens are formal liens that must be in writing, include certain words and information and eventually be recorded at the local courthouse.

Notably, real estate mechanics’ liens are considered one of the most confusing aspects of real estate law in Ohio. Real estate mechanics’ liens can be asserted by contractors, laborers and even the people who provide materials to construction projects. Those who add surface or sub-surface drainage to property can also assert this lien.

There are strict requirements on when the written real estate mechanics’ lien must be recorded and what it must include. Ironically, the paperwork can sometimes be filed up to 60 days after completion of almost any work on a construction project.

Illustratively, a contractor might provide a few hours of labor to a construction project at the very beginning of that project. If the project’s construction continues for several months, even though the contractor never returned to the project, that first contractor could possibly record a real estate mechanics’ lien a couple months after the other contractors finish their work, if that first contractor was not paid.

Because of the delayed recording opportunities for real estate mechanics’ liens, every buyer of real estate should get an affidavit from the seller indicating that no work that could give rise to a real estate mechanics’ lien was conducted on the property for several months prior to the sale.

As a result, mechanics’ liens is a necessarily ambiguous term, because the same words can have completely different legal definitions.

Lee R. Schroeder
https://www.limaohio.com/wp-content/uploads/sites/54/2015/11/web1_Schroeder-Lee-RGB3.jpgLee R. Schroeder
LEGAL-EASE

By Lee R. Schroeder

Contributing Columnist

Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-523-5523. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.

Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-523-5523. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.

Post navigation