Overview of Establishing a Construction Lien

The procedures for establishing and perfecting a construction lien differ slightly, but significantly, depending upon whether the lienor is categorized as: 1) a contractor, or material supplier, with a direct contract with the owner, 2) a professional lienor, 3) a subdivision improver, 4) a laborer, or 5) one who provides labor, services, or materials as a subcontractor, sub-subcontractor, or a material supplier to either of them.

In general terms, the steps to follow in establishing and perfecting a construction lien are as set forth herein, with each of these requirements being addressed in more detail below. Contractors, i.e., lienors with a direct contract with the owner, other than laborers, materialmen and professional lienors, must satisfy the following steps in order to establish and perfect a construction lien:

1. Record the Claim of Lien within ninety (90) days from the date of last performing work on the project (for purposes of calculating the ninety (90) day period, the lienor cannot include punchlist, corrective, or warranty work); and
2. Serve a copy of the Claim of Lien prior to or within fifteen (15) days after recording; and
3. Serve a Contractor’s Final Affidavit upon the owner at least five (5) days prior to filing a lawsuit to foreclose on the Claim of Lien; and
4. File a lawsuit to foreclose on the Claim of Lien within one (1) year of recording of the Claim of Lien, or sixty (60) days from the date of service of any Notice of Contest of Lien, whichever is earlier.

Materialmen with a direct contract with the owner, laborers, and professional lienors are exempted from the requirement of serving the Contractor’s Final Affidavit.

All other lienors who do not have a direct contract with the owner must satisfy the following steps to establish and perfect a construction lien:

1. Serve a Notice To Owner upon the owner and all others as required by statute within forty-five (45) days from the date of first providing labor, services, or materials to the project, or within forty days from the date of first providing labor, services, or materials if the Notice To Owner is served by certified mail, return receipt requested, and the mailing is recorded on a U.S. Postal Service certified mail log sheet, stamped by the Post Office; and
2. Record the Claim of Lien within ninety (90) days from the date of last performing work on the project (again, not including punchlist, corrective, or warranty work in calculating the time period); and
3. Serve a copy of the Claim of Lien prior to or within fifteen (15) days after recording; and
4. File a lawsuit to foreclose on the Claim of Lien within one (1) year of recording of the Claim of Lien, or sixty (60) days from the date of service of any Notice of Contest of Lien, whichever is earlier.

Generally, even when there appears to be a payment bond on a private construction project exempting the property from liens, the procedures for establishing both a perfected construction lien and a perfected bond claim should be pursued, as the surety may have defenses to claims against the bond.

Go to Preparing a Notice to Owner Form

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DISCLAIMER AND CAUTION: THESE MATERIALS ARE PROVIDED FOR GENERAL INFORMATIONAL PURPOSES ONLY AND ARE NOT INTENDED NOR SHOULD THEY BE CONSTRUED AS LEGAL ADVICE AS TO ANY PARTICULAR SET OF FACTS OR CIRCUMSTANCES. DUE TO THE COMPLEXITY OF THE CONSTRUCTION LIEN LAW STATUTES AND THE CASES INTERPRETING AND APPLYING THE STATUTES, IT IS RECOMMENDED THAT COMPETENT LEGAL COUNSEL BE CONSULTED IN REGARD TO ANY QUESTIONS AS TO THE APPLICABILITY OF CONSTRUCTION LIEN LAW TO ANY SET OF PARTICULAR FACTS.