Everyone works for money. As all people need it, they might be disappointed once they are not paid for their work. Unfortunately, that often happens within the construction niche. If the contractor didn’t have luck with a client in Alabama, the next step is filing a claim to get what belongs to them. This legal tool is available only to licensed contractors in this state.
Once you’ve ‘forced’ to file mechanic’s liens in Alabama, you should learn how to do it properly. You need to know that using this legal tool provides you with many rights, but it is a great responsibility. You are in charge of doing everything by laws and meeting deadlines.
Who Can File a Claim?
A mechanic’s lien is when a contractor or construction firm submits a claim to the Alabama Department of Revenue for not being paid on a project. The contractor must file this charge before the completion of the project. If you skip doing that on time, you may have to pay the filing cost if the claim happens to be invalid.
Many subcontractors may work on a construction project but do not actually supply all the materials and labor that a company requires. If they fail to file a mechanic lien properly, they will have to pay for all their labor fees.
Some sub-contractors hire other sub-contractors during a construction project. In case of not paying, anyone employed by sub-contractors will be able to file a lien against them. That might be necessary to recover their costs. That could be used in conjunction with a general contractor’s lien or filed for a specific sub-contractor.
Don’t Rush with Lien
Although this procedure is called a mechanic’s lien, this document is only one (final) part of this process. Many steps and rules must be followed in order even to be entitled to claim your payment using this legal tool in Alabama.
Unlike some other states, construction lien is not possible to enforce on public land in Alabama. You can do that only on private property. It means that if the client didn’t pay you even after all warnings and attempts to make a deal, the court might order the sale of the property to settle the owner’s debts to you.
See the following link to learn more about debt priority on the property: https://www.justice.gov/jm/civil-resource-manual-95-priority-liens
Steps before Filing a Claim
Before going with a mechanic’s lien, you need to send a letter of intent to the property owner (client). If you are a contractor, this step is not a must, but it provides you with security and assurance that you will be paid. You can go without filing a claim, but debt collection will be more complicated.
If you want, you can go directly with a mechanic’s lien once you finish or cancel your work on the project. You just have to do that within the next six months after project completion. For subcontractors, that deadline is even shorter – four months.
Subcontractors and laborers must give prior notice to property owners. There are no specific deadlines for this preliminary notice to be made. It’s crucial to send these notices to clients within a reasonable period. That is how they have a chance to settle their obligations on time.
But if that does not happen, you have proof that you ‘reminded’ them, and they did not respect the agreement. Then, filing the mechanic’s lien is completely legitimate.
When It Comes to Enforcement
Alabama’s law is not too strict in terms of sending many prior notices before you finally file a mechanic’s lien. Moreover, you do not even have to inform the debtor about the claim. After a mechanic’s lien is recorded, the property owners have another chance to settle their debts and avoid any legal action.
The good thing about mechanic’s liens in Alabama is that they are effective legal tools. Claimants generally manage to get their money before the obligation to enforce that claim. When that happens, they must go to the local office and cancel the lien request.
In rare situations, further action is required in the form of filing a lawsuit. Foreclosure can occur because the deadline for debt collection in Alabama is shorter than other states – 6 months from filing the claim (when the debt became due).
Do You Need a Lawyer?
Suppose this is the first time you have encountered a situation where you have to claim your money through a mechanic’s lien. In that case, you are probably considering hiring a lawyer. It may be a good move, but you need to know a few things so you can figure out if that pays off for you.
The most important thing to know is that hiring a lawyer will cost you. That will be a bare expense as it’s not covered by the amount you claim from the property owner. No attorney’s fees, court taxes, etc. will be charged in that debt. Thus, hiring a lawyer to file a claim is worthy only in the case of large debts.
But if you prefer using professional help, look at foreclosure attorneys in your area who specialize in this situation. They may offer a free consultation and then charge a set fee upon completing all the necessary paperwork.
A foreclosure lawyer in your area may be able to provide you with valuable information about the mechanic’s lien process in AL. You do not have to hire them, as all forms and instructions are available online. Look for more information before filing anything, and make sure you state all relevant details.
The purpose of a mechanic’s lien is not to settle debts by force, because for many reasons, it can happen that the one who hired contractors does not have the money to pay them. With this legal tool, the debtor is given a chance to make all settlements out of court in some foreseeable time. Filing a lawsuit is an option that everyone wants to avoid. Still, if it is necessary, the claimant has an absolute right to it.
Salman is a prolific environmental writer, and has authored more than 500 articles in reputed journals, magazines and websites. He is proactively engaged in creating mass awareness on renewable energy, waste management, sustainability and conservation all over the world.
Salman can be reached on salman@cleantechloops.com
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