Real estate construction projects, ranging from erecting brand-new buildings to remodeling projects, require investment and create a degree of risk. Property owners must hire professionals to complete the project.
The funds that they deposit toward the cost of the project can be at risk should anything go wrong. Therefore, most property owners do not pay in full for work performed or materials delivered up front. The companies supplying the construction project and performing the work have to accept partial payment initially and typically receive the balance owed after completing the work.
In some cases, disputes arise that may result in the civil courts granting a mechanic’s lien against the property. Who can secure a mechanic’s lien?
Businesses and professionals can request liens
The laws about mechanic’s liens are different in New York when compared with New Jersey. However, the same basic standards apply in both states. Typically, any professional or business that performs work or supplies materials for a construction project has the option of pursuing a mechanic’s lien.
The rules vary depending on the type of property and other details. Typically, any party that helps with a major construction project but does not receive payment in full can secure their right to repayment by going to civil court and requesting a mechanic’s lien. A mechanic’s lien prevents the owner from selling or even refinancing the property without first paying contractors, construction firms or suppliers the full amount due for the services or materials they previously provided.
Both professionals seeking a lien and property owners trying to avoid or remove one may need help addressing the real estate dispute that led to the lien request. Learning more about state law can help both homeowners and professionals protect their rights after a construction project.
