Property Lien(aka Mechanics Lien): What Is It And How To Avoid It + Release Of Lien Form

Hi, I’m John Francis, the owner of Northern Virginia Roofing and Exteriors a 51 year old family owned and operated home improvement company and in this video we’ll talk about property liens or more commonly known as Mechanics Liens. What are mechanics liens? what can you do to prevent them and what to do if you get one. I also give away a Lien Release Form at the end of this video so stay tuned! A lien is a legal notice attached to your property approved by your local municipality informing everyone that you owe a creditor money. There are a few different types of liens that can be filed against your home. First, a Mechanics Lien can be filed by an unpaid contractor that did work on your home also referred to as a construction lien. Secondly, a Laborer’s Lien is filed by a subcontractor or crew that did work on your home. The last one, is a Materialman’s Lien or supplier’s lien and it is filed by the supplier who provided materials for your home. The lien is recorded with the county recorder’s office. Since this is a legal binding notice enforced by the county, you can’t sell the house because the title is clouded, or refinance it, and you might have a hard time getting any credit approved until the lien is satisfied. To satisfy the lien, you will have to pay the amount of the lien to the person who placed the lien on your home. So, why would a contractor, subcontractor or supplier place a lien on your property? Simply put they place liens on a property because they haven’t been paid. Whether it is justified or not? It doesn’t matter. This is the one tool a contractor, subcontractor or supplier has to collect the money without the expense of a lawsuit. Here are some “best practices” for you as a homeowner to follow to greatly reduce the possibility of a lien being placed on your home. The most important thing you can do to avoid all these problems is to hire a Qualified Local Contractor or QLC. A QLC will strive to maintain excellent customer relationships by working with their clients to resolve problems, perform quality work, always pay their subcontractors and vendors, and conduct themselves professionally with the goal of building a successful business. Finding a Qualified Local Contractor will take some work on your part but it will potentially save you a lot of time, money and headaches. Click here to learn how to find a Qualified Local Contractor. Here are some other recommendations Hire only licensed contractors and check the contractor’s license status. You can find the links to Virginia, Maryland and DC contractor license agencies in the description below. Make sure your contractor hires only licensed subcontractors or crews, and check their licenses. Check your contractor’s reputation for paying subcontractors and material suppliers, and check for lawsuits at the local courthouse. Get a list of all the subcontractors the crews, the laborers, and material suppliers to be used by your direct contractor. After you hire a contractor, make Sure Your Written Contract Includes: A payment schedule that states when specific phases of the work start and end and the price for each segment from the contractor. Put in writing that you require Lien Releases at the time of each payment as part of the contract from the contractor, subcontractors crews and suppliers for work performed and material supplied to date. It should also include the identification of subcontractors or crews for each segment from the contractor. as well as the identification of material suppliers from your contractor. As you can see you can avoid liens being put on your house if you take the proper steps before you sign your contract by making lien releases mandatory and getting the release signed off throughout the different phases of the work. If the contractor, subcontractor and material suppliers all sign lien releases, then they can’t put a lien on your home. If any of these parties refuse to sign a lien release, then you need to find out why before you make any payments to the contractor. Click here to learn how to avoid the most common contract missteps. After the work is completed but before you pay in full: Get a release of lien for the workmanship completed by the contractor or crews, notarized by the contractor, stating that once you pay them in full, they waive any right to file a lien. Get a release of lien from the material supplier, from the material used on your project it should be on the supplier’s company letterhead, not the contractor’s, stating that all the material has been paid for. You don’t want to pay the balance of the project until you have a lien release signed by your contractor, their crews or material supplier because if you pay the contractor in full but crews or the supplier didn’t get paid, and then a lien is placed on you home, you will be responsible to satisfy that lien even though you already paid the contractor in full. Click here to download the conditional release of lien form. The topics of liens and other important topics are covered in great detail in my eBook: The Ultimate Hail Damage Guide for Homeowners Learn the Storm Damage Industry Secrets and Avoid Getting Ripped Off. Click here to get your free copy. Thank you so much for watching! Make sure to subscribe by clicking on the link below because I have great videos like this coming out soon and I don’t want you to miss them. If you have any questions about mechanics liens or any other questions call the number you see on the screen. Otherwise click on the next video in the series to learn more.

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