Perfection of a valid Mechanics’ Lien is a necessary prerequisite to assertion of the right to be paid. At least, one cannot credibly proceed to trial without it.
Many trades, persons and businesses affected should have previously noted and taken advantage of the Mechanics’ Lien “Prompt Payment Act” provisions, which mandate that all contractors, subcontractors and materials suppliers must pay their subcontractors, suppliers and laborers within 10 days after receipt of funds. After 10 days, improperly withheld funds begin to earn interest at the rate of 18% per annum. In addition, after 30 days, the lower tier contractor or supplier may file suit and, upon judgment, may also obtain attorney’s fees. Importantly, this right to interest and attorney’s fees cannot be waived by contract or otherwise!
An affidavit to obtain a mechanic’s lien must be filed within 75 (calendar) days after the contractor or materials supplier last furnished or provided services or materials. Other important changes now require the filing (recording) of Notice of Commencement (“NOC”) by the Owner, or General Contractor. Also required is the service of a Notice of Furnishing (“NOF”) by each contractor, subcontractor, or materials supplier, when each first performs work or supplied materials. Timely service of the Notice of Furnishing on all parties is a mandatory prerequisite to obtaining a valid lien for all work and materials provided on a construction project!
Having perfected a valid lien, by timely recording the Affidavit and serving it on the proper parties timely, should now lead to speedy resolution by offer of payment in exchange for a signed Waiver of Mechanics’ Lien.
WARNING: DON”T SIGN SUCH “STANDARD” LIEN WAIVER DOCUMENT WITHOUT LEGAL COUNSEL!!!
Among the many reasons for not executing such “ordinary” lien waiver is a subsequent denial or failure of payment. Additionally, the incentive to pay fully and timely by the debtor entity is gone.
A far better resolution may be obtained by executing a Conditional Waiver of Lien which provides that upon the condition of payment of the full amount due, the waiver is valid; otherwise, it isn’t worth the paper on which it was written and is of no legal effect.
The following form is suggested (first filling in the blanks):
WAIVER OF LIEN
To all whom it may concern:
In consideration of the sum of ________________Dollars, ($_______), and other valuable consideration to be paid, and specifically conditioned upon such payment timely and fully, the undersigned does hereby waive, release and relinquish any and all liens or claims for funds,, or right to lien or claim, for labor and/or materials, fuel and/or machinery, or all of them, furnished to date hereof, for the premises known and described as: (Street address, City, County, State ,Zip)______________________, County Auditor’s Permanent Parcel No.: ____ / _____ / ________.
Witness my / our hand and seal given this ___ day of _______, 2001, at (City)_______________, Ohio.
(Signature) ______________________, for (Firm, Entity, or Trade)____., by and through its Authorized (Director, Officer, Manager, Agent or Attorney).
In conclusion, the Lien Claimant, having performed fully as agreed, now has the right to (insist on) being paid, and should take every precaution toward preserving and furthering that goal, prudently.
A government which robs Peter to pay Paul can always depend on the support of Paul.
George Bernard Shaw