Do home buyers have protection against mechanics liens in Minnesota?

Full question:

My husband and I built a home in Minn last year. closed on our house May 7 2010. after we moved in we received 3 mechanics lien notices - these are all filed with the county we live in. We paid for our home - the builder walked away with around 7K of our money plus he did not pay the subs. as home buyers do we have any protection? and can we get these liens removed? I appreciate your help! One other point - our builder went out of business and skipped town.

  • Category: Contractors
  • Subcategory: Construction Liens
  • Date:
  • State: Minnesota

Answer:

If a mechanic's lien has been filed against your property, you have several options. You can wait for the lienholder to file a lawsuit to enforce the lien. If they do, you can raise defenses in your response. If no lawsuit is filed within one year, the lien becomes unenforceable.

If you believe the lien is unjustified, you can file a lawsuit to have it removed. This is known as an action to determine "adverse claims" in real estate. This may be necessary if you want to sell your home before the one-year deadline. Consulting a private attorney can help you decide if you need to file this action.

There are ways to settle a lien after a lawsuit begins. You might settle out of court, ensuring that the lienholder removes the Notice of Lis Pendens and files a Satisfaction of Mechanic's Lien with the county registrar. If the case goes to court, a judgment will take precedence over the lien, and the lien will be removed if the court rules in your favor. However, if the court finds for the lienholder, it may order the sale of your property to satisfy the lien.

If the lienholder does not follow the necessary steps, they may still pursue recovery through a civil action against the contractor or you, the property owner.

For one hundred twenty days after all work is completed, you can withhold payment from the contractor to cover subcontractors unless you have lien waivers from them. Minnesota law does not provide a specific way to release a lien, except for automatic dissolution if a lien statement is not filed within one hundred twenty days of work completion or if a lawsuit is not filed within one year.

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This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What creates a lien on a property?

A lien on a property is typically created when a creditor has a legal claim against the property due to unpaid debts. In construction, a mechanic's lien arises when a contractor or subcontractor has not been paid for work performed or materials supplied. This allows them to secure their payment by placing a claim on the property until the debt is settled.

What are the rules for liens in Minnesota?

In Minnesota, a mechanic's lien must be filed within 120 days after the last work is completed or materials are supplied. If no lawsuit is filed to enforce the lien within one year, the lien becomes unenforceable. Property owners can dispute unjust liens through legal action, and lien waivers may be required to ensure payment to subcontractors.

What can cause a lien?

Liens can be caused by various factors, including unpaid debts for services rendered, loans, or taxes. Common causes include unpaid construction work, property taxes owed, or judgment debts from lawsuits. When a creditor files a lien, it secures their claim against the property until the debt is resolved.

How long does a lien stay on your property in Rhode Island?

In Rhode Island, a mechanic's lien remains in effect for one year from the date it is filed. If the lienholder does not initiate legal action to enforce the lien within that time frame, the lien becomes unenforceable. Property owners can also seek to have unjust liens removed through legal proceedings.

What is the most common lien on property?

The most common lien on property is a mortgage lien, which secures a loan taken out to purchase the property. Other frequent types include mechanic's liens, which arise from unpaid construction work, and tax liens, which are imposed by the government for unpaid property taxes.

Can someone put a lien on my house without a contract?

Yes, a lien can be placed on your house without a formal contract in certain situations, such as unpaid taxes or court judgments. However, for mechanic's liens, a contractor or subcontractor typically must have a contractual agreement to perform work on the property. It's essential to address any debts promptly to avoid liens.