If you have a customer that has failed to pay his invoice, you may need to move quickly to preserve your most important means of collecting on that debt. In Maryland, contractors that have provided certain types of services are often eligible to obtain a Mechanics' Lien on the property where products or services were provided. If the debt is not paid after a Mechanics' Lien is ordered by the Court, the property may be sold to satisfy the customer's obligation to you.

The following are some frequently asked questions about Mechanics' Liens:

What types of contractors can get a Mechanics' Lien?

Just about any contractor is eligible to apply for a Mechanics' Lien if he furnishes labor or materials in connection with the improvement of a building or land. The Courts have interpreted the law broadly to include just about any contractor or supplier, including architects, engineers, general contractors, plumbers, HVAC suppliers, electricians, paving companies, landscapers, materials suppliers and rental equipment providers. Many other trades and suppliers are covered as well.

What's the minimum amount a customer must owe before a Mechanics' Lien can be obtained?

There is no minimum amount a customer must owe, but a Mechanics' Lien can only be obtained if the property is improved by at least 15% of its value. The 15% test takes into account all work performed by all contractors. So if a vacant lot worth $100,000 is surveyed and permitted by an engineering firm for $2,000, and then graded and filled by a contractor for $13,000, both the engineering firm and the contractor could obtain a Mechanics' Lien, even though they could not do so if only their own work had been performed.

Do I have to appear in Court to get the Mechanics' Lien?

Not always. After the initial filing is made with the Circuit Court, the Court schedules a hearing and the property owner has about 30 days to file an answer. If the owner doesn't file an answer, the Court usually cancels the scheduled hearing and the Mechanics' Lien is granted. If the owner files an answer disputing some of the facts claimed by the contractor, a hearing is held about 45 days after the initial date of the Court's order. At that hearing, the contractor is usually asked to testify and present facts that support the lien. The owner also has a chance to testify and present facts. Sometimes the Court grants the lien right after that hearing. Sometimes a trial date may be set to provide additional facts and information. Most Mechanics' Liens do not end up in a full trial.

How long does it take to get a Mechanics' Lien?

There is a delay between the time the contractor's initial filing is made with the Court and the time the Court issues an order directing the owner to show why the Mechanics' Lien should not be granted. This delay is simply based on Court administration and processing. After the Court issues its show cause order, the owner is usually given 30 days to answer. If no answer is filed, or if the answer is improperly filed, the contractor may obtain the Mechanics' Lien immediately. Otherwise, it could take another 15 days if the Lien is granted at the hearing. Or even another 6 months or more if a trial date is set. Many Mechanics' Liens are granted without a hearing in about 30 days. Many more are granted after the hearing in about 45 days. But some go to trial and could take up to 6 months or more. The important thing, however, is to file for the Mechanics' Lien because that will prevent the owner from selling the property to avoid the lien.

Can I get a Mechanics' Lien if I'm a subcontractor?

Subcontractors can obtain Mechanics' Liens as well, but they are subject to more extensive requirements and must provide additional notices to the owner. For example, subcontractors must notify the owner within 120 days after completion of the work that they intend to seek a Mechanic's Lien. The notice must meet certain requirements. If the notice is not provided, or does not meet the requirements, the subcontractor may not obtain a Mechanics' Lien. Subcontractors may also be limited in the amount they can obtain from the owner if the owner paid the general contractor.

How much time do I have to file for a Mechanics' Lien after the work is performed?

Contractors must file for a Mechanics' Lien within 180 days after the work is performed or they may not obtain one. Subcontractors must also have provided the notice described above to the owner within 120 days after the work is performed. This rule is firm and Courts have routinely dismissed late-filed applications for Mechanics' Liens. Note that if the work provided is ongoing, and all the subject of a single contract (such as supplying lumber over the duration of the project), the date that is important is the last date on which products or services were provided. The Court will not require contractors to continually seek liens throughout the term of the agreement, even if invoiced amounts are adding up and are unpaid. If there are several contracts, the important dates will be those dates on which work was completed or stopped under each contract.

What if the customer doesn't own the property where the work is performed?

A Mechanics' Lien can only be obtained if there is a contract between the property owner and the contractor. Note, however, that a person that has a contract to purchase a piece of property is generally deemed to be the owner of that property. So if a contractor performs work for the contract purchaser of the property, the contractor can usually obtain a Mechanics' Lien against the property.

Do I have to have a written contract in order to get a Mechanics' Lien?

You do not need a written contract in order to get a Mechanics' Lien. But you must be able to establish that an agreement existed between you and the owner for the work performed. There are many ways to establish the existence of an agreement that is not written, and one important method is to show that the owner was aware of the work you provided, benefitted from it, and did not stop you when he knew you thought there was a contract.

If I performed several projects for a customer, do I need a Mechanics' Lien for each one?

A lot depends on your contract with the customer/owner. If the contract, which does not have to be in writing, says that you will provide various types of work over an extended period, you do not need a separate Mechanics' Lien for each type of work. But if the contract is for a specific project, such as to furnish and install a boiler, and you have another contract to furnish and install an air conditioning unit, you would likely need to obtain a Mechanics' Lien for invoices unpaid under each contract.

Do I have to have a Maryland Home Improvement Commission (MHIC) license to get a Mechanics' Lien?

If a Maryland Home Improvement Commission (MHIC) license is required for the type of work that you provide, you must have the MHIC license in order to obtain a Mechanics' Lien. The same is true of licenses that are required for plumbers, electricians, engineers and others. Note, too, that a customer is often able to avoid paying a contractor if work is performed without the proper license.

If the customer sells his property before I apply for a Mechanics' Lien, can I go after the buyer?

If a customer sells his property to a buyer in good faith, a contractor no longer has the right to obtain a Mechanics' Lien against the property for work performed for the seller. If, however, the contractor had filed to obtain the Mechanics' Lien, even the day before the closing date of the sale, the buyer will take the property subject to the contractor's right to obtain the Mechanics' Lien. That is one reason why it is important to file for the Mechanics' Lien even if you think you can negotiate with the customer to obtain payment.

If I get a Mechanics' Lien and other contractors or mortgage holders do as well, who has priority if the property is sold to satisfy the debts to us?

If there are multiple lien holders, the proceeds from the sale of the property will be applied in the order in which the liens were obtained. First come, first served. This rule often gives contractors superior rights over even a bank that holds the mortgage on the property.

If I can't get a Mechanics' Lien, what else can I do to collect what is owed to me?

If you can't get a Mechanics' Lien, you have other options to collect the debt, including suing for breach of contract. If you win a lawsuit for breach of contract, the judgment will also act as a lien on any property the defendant has in the county in which the judgment is obtained. You can also enter the judgment in other counties to obtain a judgment lien on real estate in those counties as well.

If you have additional questions about Mechanics' Liens, or to discuss the facts of your particular situation, please contact the Maryland law offices of Thomas Lynch & Associates for a free initial consultation and case evaluation.

Thomas Lynch & Associates
The Crosby Building
705 Melvin Avenue, Suite 104
Annapolis, MD 21401
Phone: (410) 349-4990
Fax: (443) 926-0574
e-mail

Thomas Lynch & Associates provides legal advice to businesses throughout Maryland including Anne Arundel County, Howard County, and Baltimore County, as well as the cities of Baltimore, Arnold, Odenton, Crofton, Pasadena, Severna Park, Columbia, Ellicott City, Elkridge, Glen Burnie, Riva, Edgewater, Annapolis, and Bowie.