Mechanics Lien Judgments vs Other Judgments

#10 of the Top 10 Misconceptions about Mechanic's Liens

A mechanic's lien judgment is identical to any other judgment obtained after a court trial

Mechanics Lien Judgments vs Other Judgments - They're all the same

Not true although the procedure followed during a mechanic's lien lawsuit is similar to that of the "typical" lawsuit.

To prevail at trial, a mechanic's lien claimant must show:
  • 1) that all notice and timing requirements have been met
  • 2) the value of the entire labor and/or materials and/or equipment etc. provided to the project
  • 3) the balance owed to the claimant
If successful at trial, the court will enter a judgment on the claimant's mechanic's lien.

Mechanics Lien Judgments vs Other Judgments - A mechanic's lien judgment is different from the more well-known money judgment

A "money judgment" can be based upon a contract, a tort (such as a personal injury claim), or various other types of claims. A money judgment can be enforced by levying almost all types of property owned by the judgment debtor.

By contrast, a judgment on a mechanic's lien merely entitles the mechanic's lien claimant to implement a foreclosure sale as to the property, with the proceeds of the foreclosure sale going to the parties with claims on the title in the order of their priority.

Unlike a "money judgment", a mechanic's lien judgment does not allow the claimant to levy any bank accounts or any other personal property of the owner.

A mechanic's lien by itself does not entitle the claimant to an equitable claim in the property until a lawsuit has been filed on the mechanic's lien and a judgment is entered on the mechanic's lien.

There's definitely a big difference when it comes to mechanics lien judgments vs other judgments.

How the mechanic's lien affects the property owner

A mechanic's lien is recorded with the county recorder and is seen by any person that researches the title to the property at the county recorder's office.

The mechanic's lien provides notice to any interested person that the claimant may pursue his equitable claim against the property via a lawsuit (or at least that the claimant has reserved his right to pursue his equitable claim via a lawsuit).

If a judgment is ultimately entered after a lawsuit on the mechanic's lien is filed, the claimant has the right to foreclose on the property and to recover the proceeds of a foreclosure sale according to the claimant's position on title.

Lenders will be concerned about lending money to a property owner if a mechanic's lien has already been recorded, as the mechanic's lien would provide the mechanic's lien claimant with "priority" over the lender if the claimant obtains a judgment on his mechanic's lien.

Likewise, potential purchasers of the property typically will require that the title to the property be "free and clear" at the time the property is purchased, as mechanic's liens are still valid against the property even if the owner sells the property.

So that's the story on mechanics lien judgments vs other judgments - they are definitely different from each other.

For more information on mechanics lien judgments vs other judgments please contact Dave Barnier, Attorney at Law and author of this article.

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Above article written by:
David J. Barnier,
Partner at Barker Olmsted and Barnier, APLC

Disclaimer -
This article presents a discussion of general laws, rules, and strategies related to mechanic's liens and other construction issues and is intended to provide background information that will assist the reader in understanding the general laws and rules that apply. Examples and hypotheticals are described in this article for the purpose of illustrating these general rules, however no information within this article should be relied upon when analyzing a specific real-life situation.

For each real-life situation that the reader experiences, it is necessary that the reader consult with an experienced construction law attorney to ensure that the reader's specific situation is evaluated. The laws and rules affecting mechanic's liens and construction are extremely complex and no attorney can provide in a writing an explanation that will empower the reader to use only the information in an article to evaluate how the law will apply to a specific real-life situation. In other words, the reader should not rely on the information in this article when addressing a particular real-life situation.