Tuesday, June 1, 2010

Indiana Mechanics Liens

In Indiana, liens filed on private property or on funds relating to a public project are known as Mechanic’s Liens. When an Indiana construction lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property. Indiana mechanics liens filed with regard to public projects attach to the funds held by the public owner.

As for who can file an Indiana mechanics lien, contractors, as well as subcontractors, design professionals, sub-subcontractors and material suppliers can file an Indiana mechanics lien. If a company supplies material to a material supplier, they are not eligible to file an Indiana mechanics lien claim.

In some circumstances, Indiana requires potential lien claimants to file pre-lien or preliminary notices prior to filing an Indiana mechanics lien.  Within 30 days from beginning alteration or repair work on a single or double family, owner occupied residence, a claimant must provide notice to the owner that they are supplying labor or materials.

Within 60 days from beginning original construction work on a single or double family residence, a claimant must provide notice to the owner that they are supplying labor or materials

As for the filing of the Indiana mechanics lien claim itself, the claimant must comply with the specific timing requirements set forth in the Indiana lien law.  The filing of a notice of intention to hold an Indiana mechanics’ lien for a commercial project must be completed within 90 days after the day on which the lien claimant last performed labor or furnished materials.
The filing of a notice of intention to hold an Indiana mechanics’ lien for a residential project must be completed within 60 days after the day on which the lien claimant last performed labor or furnished materials.

In Indiana, a mechanics lien or "statements of claim" on most public projects must be filed within 60 days after the date of last labor performed, last materials furnished, or last services rendered by the claimant.

Note that to file an Indiana mechanics lien, you do not need a written contract.  Oral contracts are sufficient if you have sufficient documentation to show the existence of an agreement or that you performed the work for which you are filing an Indiana mechanics lien claim.

Filing an Indiana mechanics lien is a great way to collect oustanding receivables because on a private project, the Indiana mechanics’ lien places an encumbrance on the property that makes it difficult to resell or re-finance the property without first removing the lien.

In addition to Indiana mechanics lien claims, LienItNow.com also provides other methods for collecting money that is owed on a construction project.  These other services include the provision of Stop Notices and Bond Claims.

A Stop Notice is a notification that has the ability to enhance the effectiveness of a mechanic’s lien.  A Stop Notice, or a notice to withhold funds, is sent to the company that is financing or funding the construction funds for a project.  Once that company receives the Stop Notice, that company has notice that it should withhold sufficient money to satisfy the stop notice claim.  The purpose of the Stop Notice is to provide the lender, financiers or funders of the construction project notice that there is money owed to a contractor, subcontractor or supplier so that an inquiry can be made as to why that money is not being paid.

Bond claims can only be filed on a project where the owner, contractor or subcontractor has obtained a payment bond to ensure that every contractor receives payment for the work performed on the Project.  The payment bonds issued by sureties for construction projects have specific timing requirements, but most require claimants to submit claims against the bond within sixty to ninety days from the claimants’ last date of work.  Bond claims are as or more effective than a lien claim because the payment bond acts as a guarantee that payment will be made for work properly completed.

For more information on filing an Indiana Construction Lien, an Indiana Mechanics Lien, an Indiana Stop Notice, an Indiana Bond Claim, or an Indiana pre-lien notice, please visit http://www.lienitnow.com/Indiana-faq.asp.

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