Mechanic’s liens in Maryland allow a general or subcontractor to obtain a lien on the building on which they performed work or supplied materials. In commercial real property, however, some confusion may arise as to the definition of “owner” as outlined in the Maryland Mechanic’s Lien Statute.
Maryland law defines “Owner” as follows: “The “Owner” means the owner of land except that, when the contractor executes the contract with a tenant for life or years, “owner” means the tenant.”
Essentially, the “owner” can either be the actual owner of the property or the tenant. The distinction depends on the party with whom the general contractor has contracted. While this distinction may not seem important, it does affect what is actually subject to the lien. For example, a general contractor may enter into a multi-million dollar project with a tenant of a building. In those situations, if a mechanic’s lien is awarded, the contractor’s interest only extends as far as the interest that the tenant has in the property. As such, a contractor with a mechanic’s lien against a tenant of a commercial property is only entitled to lien the leasehold interest. On the other hand, if a general contractor obtains a mechanic’s lien against an owner of property, the contractor would have the right to initiate a judicial sale of the property in order to satisfy the judgment.
Mechanic’s liens are a powerful tool for contractors seeking to recover for non-payment of their work; however, in Maryland, contractors must be aware of the extent to which the lien can be placed on the building or property.
For additional information on mechanic’s liens, contact Michael Siri at email@example.com.