The process for filing a mechanic’s lien in Maryland can be confusing and appear somewhat redundant to a contractor simply seeking to obtain payment for work performed and materials furnished. From start to finish, a mechanic’s lien requires multiple steps in order to secure payment. These steps include: 1) Pre-Lien Requirements; 2) Filing of a Petition for Mechanic’s Lien; and 3) Enforcement of the Mechanic’s Lien.
The first step to successfully obtain a mechanic’s lien starts with determining whether a mechanic’s lien may be applied on the project. These considerations include:
- Timing – In Maryland, a contractor or subcontractor must bring a mechanic’s lien claim within 180 days from the last day they performed work or supplied materials on the project. The 180 days does not include warranty work.
- Notice – Subcontractors, including lower tiered subcontractors must provide a notice of intent to lien a property within 120 days from the last day they performed work or supplied materials on the project. The Notice of Lien in Maryland must be served on the owner of the property that is subject to the mechanic’s lien.
- Lienable Properties – In Maryland, mechanic’s liens can be placed on non-public new construction or renovations that increased the value of the property by 15%. A contractor cannot bring a claim against public property.
- Party Bringing Forth the Lien – Obviously, construction contractors, subcontractors and suppliers may bring forth a mechanic’s lien in Maryland. Additionally, landscape architects, interior designers, engineering services, and land surveyors can bring forth a claim for a mechanic’s lien.
Once all pre-lien requirements have been met, a Petition for Mechanic’s Lien can be filed in the county in which the project is located. The actual Petition for Mechanic’s Lien should include:
- Name and address of the petitioner
- Name and address of the owner
- The nature or kind of work performed or materials furnished
- A description of the land and building
- Evidence of notice to owner, if the Petitioner is a subcontractor
- Affidavit by the Petitioner confirming the facts and amounts at issue
- Copies or originals of all material papers
After filing, the Court will review the Petition and, if the Court determines that a lien should attach, will schedule a show cause hearing. A show cause hearing requires the owner of the property to provide evidence as to why a lien should not be attached to the property. This is the first of two potential hearings in the case. The owner must file an answer to the Petition or risk waiving their defenses. At the show cause hearing, the Court will make one of three determinations: 1) entry of a final mechanic’s lien; 2) denial of a final mechanic’s lien; or 3) entry of an interlocutory order. An interlocutory order serves as a temporary lien on the building and allows the Court time to schedule a Final Lien Hearing.
The Final Lien Hearing must be held within 6 months from the date of the interlocutory order. The Final Lien Hearing is the second potential hearing and acts as a final trial on the matter. Similar to the Show Cause Hearing, the Court will consider evidence and testimony from both parties to render its decision.
If a lien is established, the final step of the mechanic’s lien process involves enforcement. A petition to enforce a lien must be done within one year after the petition to establish the lien was filed. A decree of sale shall be issued, requiring the owner to remit payment no more than 30 days from the date of the decree, or the land will be sold to satisfy the debt. From a practical standpoint, liens are usually satisfied before the sale of the property.
For more information on the mechanic’s liens in Maryland, contact Michael W. Siri at 410-583-2400 or email@example.com.