Four principles underlie mechanic's lien law

REAL ESTATE MAILBAG

January 22, 1995

Q: I'm a home improvement contractor. Could you please explain Maryland's mechanic's lien law and how it affects remodeling work and home improvements?

Rod Stroup,

Loch Raven Village

A: A mechanic's lien is a claim against the property or RTC homeowner for work performed or materials furnished for or about the home. Maryland enacted the first mechanic's lien law in the United States in 1791. Interestingly, it was enacted to encourage building in and construction of the District of Columbia.

Maryland's mechanic's lien law has a long history of legislative revision and judicial interpretation culminating in the complete overhaul and restating of the law in Maryland in 1976.

The legislature recodified the mechanic's lien law by stating four underlying rules and principles:

* 1. No mechanic's lien can be established against a property or home until the property owner has notice of the claim and an opportunity to be heard in a judicial proceeding.

* 2. A mechanic's lien is established only after it is ordered by a court.

* 3. The priority of the lien -- over other liens -- is determined by the date that it is ordered by the court and not from the date the claim was filed.

* 4. The buyer of a home is protected against liens filed because of a dispute between a contractor and the previous owner. The contractor cannot place a lien on the house. If one does, a homeowner should contact his title company. The title insurance purchased at closing protects him against such claims as well legal fees to fight such claims.

The current law can be summed up as follows: You don't have a mechanic's lien against a house until a court orders one.

The purpose of the law is to encourage construction and home improvements -- by assuring payment to contractors, laborers and material suppliers, by letting them put a lien on the house if their bill isn't paid. But contractors must be careful to follow procedures.

Anyone who needs to establish or enforce a mechanic's lien should consult a lawyer who is experienced in such issues.

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