Filing a mechanics lien is one of the most effective ways to recover your payment from a non-paying client. When you record a mechanics lien, potential buyers and financiers will be able to see that there’s an unsettled payment concerning the property. This way, a mechanics lien limits the market value of a property and pushes property owners to settle the outstanding payment.
To protect property owners from bogus mechanics liens, strict rules and regulations are in place. In Delaware, as in all other states, recording a valid mechanics lien requires construction participants to adhere to the applicable statutory laws.
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This guide details the rules and requirements that you should keep in mind when filing a Delaware mechanics lien.
- Who can file a mechanics lien in Delaware?
- When to file a Delaware mechanics lien and other deadlines
- Preliminary notices in Delaware
- How to file a mechanics lien in Delaware
- Best practices when filing a mechanics lien in Delaware
Who can file a mechanics lien in Delaware?
Parties who perform labor or furnish materials to a construction project for an amount greater than $25 can file a Delaware mechanics lien, also known as a Statement of Claim. These parties include general contractors, subcontractors, and material suppliers.
However, note that Section 2703 of Delaware Statutes Title 25 Chapter 27 requires potential lien claimants to have a written contract with the property owner if the construction work that they furnish to the property is related to the land alone.
When to file a Delaware mechanics lien and other deadlines
Below are the dates deadlines in the Delaware mechanics lien filing process. You must take note of these so that you can file your documents on time and ensure that you have a valid lien claim.
Preliminary notices in Delaware
Delaware is one of the states that have no preliminary notice requirements. Construction participants in Delaware are not obligated to serve a preliminary notice on the property owner before they can record a valid mechanics lien.
What happens if you fail to serve a preliminary notice in Delaware?
There are no consequences if you do not serve a preliminary notice in Delaware.
How to file a mechanics lien in Delaware
1. Prepare your Delaware mechanics lien form
The following information must be on your Delaware mechanics lien form, according to Delaware Statutes Section 2712:
1. The name of the lien claimant
2. The name of the property owner
3. The name of the general contractor
4. The amount being claimed
- If the amount is not fixed by the contract, include a statement describing the nature and kind of the labor done or materials furnished as well as a bill of particulars (e.g. invoices).
- If the amount is fixed by the contract, include a true and correct copy of the contract, including all modifications or amendments.
5. The time when you started doing the labor or furnishing the materials
6. The time when you finished doing the labor or furnishing the materials
- If you are a general contractor, include the date of the completion of the structure, including a specification of the act or event on which you based the included date.
- If you are not a general contractor, include the date of completion of the labor performed or the last delivery of materials furnished, or both, or a specification of such other act or event on which you based the included date.
7. The location of the structure, including a description that is sufficient for identification
8. A statement saying that the labor was done or the materials were furnished on the credit of the structure
9. The amount of your claim (should be over $25) and a statement that says neither this amount nor any part of it has been paid
o If filing a mechanics lien related to 2 structures or more, write the unpaid amount due to each structure
10. The time of recording of a first mortgage, or conveyance in the nature of a first mortgage, upon the structure which is granted to secure an existing indebtedness or future advances, provided at least 50% of the loan proceeds are used for the payment of labor or materials, or both, for the structure.
The Delaware mechanics lien form does not necessarily have to be notarized but it must be filed with an signed affidavit stating that the information included and the statements made are “true and correct.”
2. Record the Delaware mechanics lien
When you are ready to record the Delaware mechanics lien, you have to do so in the office of the county clerk (Superior Court) in the county where the property is located. You may mail your Delaware mechanics lien to the county clerk’s office, or you may visit the office and file the mechanics lien in person.
Note that filing a Delaware mechanics lien may require you to pay filing fees, so be sure to call the county clerk’s office before you mail them your Delaware mechanics lien.
If you decide to file the mechanics lien by mail, your parcel must include the exact amount of filing costs. Furthermore, you must also include a second copy of your Delaware mechanics lien form and a stamped self-addressed envelope. You need a copy of the recorded mechanics lien to complete the next step.
Also, note that Delaware imposes a strict deadline for filing a mechanics lien. For parties who have a direct contract with the property owner, the deadline is within 180 days of project completion. For all other parties, the deadline is within 120 days of the last day on which you furnish labor or materials to the project.
3. Serve a copy of the Delaware mechanics lien on certain stakeholders
After filing your Delaware mechanics lien, you have to serve a copy of the lien on the property owner. This is why you need the stamped envelope mentioned in Step 2 if you record your mechanics lien by mail. Serving a copy of the mechanics lien on the property owner can be done via certified mail with return receipt requested.
There are two other documents that you have to furnish after you file the Delaware mechanics lien: a notice to the lienholders and a Writ of Scire Facias.
You are required by law to serve a notice on all lien holders of the property as well as any tenant with a leasehold interest on the property. The notice is a simple document stating that you have recorded a mechanics lien against the same property. This notice must be served via certified mail with return receipt requested within 10 days of filing the Delaware mechanics lien.
The Writ of Scire Facias, on the other hand, must be left with the person occupying the property. If the property is still unoccupied, a sheriff will attach the copy of the writ on the property.
Once you have served all the required documentation, you’re all set! Either you will get paid or you won’t, but you most likely will as the mechanics lien is highly effective in recovering payment from clients.
Note that enforcement action is already incorporated into the filing process, so a mechanics lien will be enforced (i.e. will lead to a foreclosure lawsuit) so long as you filed a valid form on time. There are also no provisions on releasing a mechanics lien in Delaware after you get your payment; the court will generally provide the release process once the mechanics lien is satisfied.
Best practices when filing a mechanics lien in Delaware
1. Serve a Delaware preliminary notice even if not required
Even if the law does not obligate you to serve a Delaware preliminary notice, it is still a good idea to notify a property owner as soon as you begin working on a construction project. Serving a Delaware preliminary notice is particularly helpful for lower-tier parties in big projects. Property owners are most likely to ensure that you receive your payment if they know that you are part of their project.
2. Keep your own copy of the recorded mechanics lien
When you file a mechanics lien in Delaware, you generally use two copies of the form: one for the Superior Court’s records and another that you serve on the property owner. The best practice is to also include a third copy that you can keep for yourself. When mailing your mechanics lien to the county clerk’s office, make sure to include this third copy to be sent back to you via a self-addressed stamped envelope.
3. Serve the notice on lienholders on the same day that you file your mechanics lien
When you file a mechanics lien in Delaware, you are obligated to notify all lien holders and all tenants who hold a leasehold interest on the property. You have 10 days after filing the mechanics lien to serve this notice, but it is best practice to serve it on the same day that you file the Delaware mechanics lien. Failing to meet the 10-day deadline is fatal to your lien claim, so better serve this notice as soon as you record your mechanics lien.