Can a Subcontractor Put a Mechanics Lien on Property?
When you are embarking on a construction project, you should talk with a Philadelphia construction contract lawyer. An attorney can help you to include clauses in your contract that can protect you from substantial financial loss and that can ensure you have a positive outcome from your development project. As you create your contract, you will want to be mindful of the risks of mechanic's liens and may wish to include contractual clauses aimed at preventing you from finding yourself with a subcontractor's mechanics lien on your property.
Curley & Rothman, LLC understands Pennsylvania laws on development and construction contracts and we can provide you with advice on negotiating a contractual agreement with a developer that protects your interests. We can also help you to address problems that arise during the construction process, including mechanic's liens being placed on your property. Give us a call as soon as you begin the process of developing land so we can assist you in protecting your investment.
Can a Subcontractor Put a Mechanic's Lien on a Property?
Liens are claims on property for nonpayment. When a lien is placed on a property, the owner of that property can be affected in profound ways. A bank will not give a mortgage to a property with a lien on it, for example. This can be a problem if you are paying for a property to be developed with a construction loan and you need to convert that loan to a permanent one at the end of the project. If a mechanic's lien is put on the property, you may not be able to get your loan to repay the construction loan when construction is complete.
Those who are paying for property development may assume that they can avoid the risk of a mechanic's lien by paying the contractor who is performing work on their home. After all, if you pay a contractor, then the contractor cannot put a lien or claim on the property alleging nonpayment. The problem, however, is that a general contractor is typically the person who a developer pays... but a general contractor is not the only one who could put a lien on a property. Subcontractors can also put liens on property as well.
If a subcontractor puts a lien on a property, this lien will be legally valid provided that the subcontractor did work on the property, was not paid for it, and followed Pennsylvania law for filing a lien. If the homeowner has paid the contractor but the contractor did not pay the subcontractors, the homeowner will find himself in a situation where there is a hold on the property that will be very difficult to get off unless and until action can be taken to get the subcontractors paid. Talking with a Philadelphia real estate lawyer becomes essential in these circumstances to try to find out what recourse, if any, you have for having the lien removed from the house.
Protecting Yourself from Mechanics Liens from Subcontractors
Protecting yourself from a mechanics lien from a subcontractor can be a challenge, as you may not necessarily know if a contractor is paying the subcontractors on time or not. You should carefully do your research when selecting a contractor to ensure that the contractor has been in business for a long time, is not in substantial debt, and has a good relationship with subcontractors wherein they get paid on time.
You should also make sure your construction contract contains a detailed construction schedule, information on subcontractors and material suppliers, and details on when subcontractors are to be paid during the construction process. This will give you the insight you need to make certain that subcontractors and material suppliers are being paid on time by your general contractor so you reduce the risk that a mechanics lien will be placed on your property.
How can a Philadelphia Construction Contract Lawyer Help?
A Philadelphia construction contract lawyer and mechanic's lien lawyer can provide invaluable assistance in drafting a construction contract aimed at preventing mechanics' liens. An attorney can also provide you with guidance on other risks of development and other clauses which you should make certain to include in your construction contract. Developing property is a major undertaking and you owe it to yourself to talk with a Philadelphia real estate lawyer to protect your interests during the development process. Call Curley & Rothman, LLC today at 610-834-8819 or contact us to find out more about how we can help you.