When you find yourself in the middle of a payment dispute, you are highly likely to recover the money due to you by filing a mechanics lien.
A mechanics lien urges property owners to settle outstanding debts. This is because when a mechanics lien is recorded against a property, potential buyers and financiers can see that there are outstanding payments associated with it. Its market value, therefore, decreases, prompting property owners to make sure that those payment disputes are settled.
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Note, however, that recording a mechanics lien requires you to follow a strict filing process. This guide explains everything you need to know about recording mechanics lien, specifically in the state of Ohio.
- Important deadlines to remember when filing a mechanics lien in Ohio
- Who can file a mechanics lien in Ohio?
- Preliminary notices in Ohio
- How to file a mechanics lien in Ohio
- Best practices when filing a mechanics lien in Ohio
Important deadlines to remember when filing a mechanics lien in Ohio
Who can file a mechanics lien in Ohio?
All general contractors, subcontractors, material suppliers, and even laborers have mechanics lien rights in Ohio.
Preliminary notices in Ohio
In Ohio, all parties who do not have a direct contractual relationship with the property owner must provide a preliminary notice, also known as the Notice of Furnishing. However, this preliminary notice requirement could be voided if the property owner does not record a Notice of Commencement pursuant to Ohio Code Section 1311.04.
The Ohio Notice of Furnishing must be in the following form:
“Notice of Furnishing
(For use in connection with improvements to property other than public improvements)
(Name of owner, part owner, or lessee or designee from the notice of commencement)
(Address from the notice of commencement)
(Name of original contractor from notice of commencement)
(Address of original contractor from notice of commencement)
Please take notice that the undersigned is performing certain labor or work or furnishing certain materials to ………….. ……………………………………………….(name and address of other contracting party)………………….. in connection with the improvement to the real property located at …………………… The labor, work, or materials were performed or furnished first or will be performed or furnished first on ………… (date).
WARNING TO OWNER: THIS NOTICE IS REQUIRED BY THE OHIO MECHANICS’ LIEN LAW. IF YOU HAVE ANY QUESTIONS ABOUT YOUR RIGHTS AND DUTIES UNDER THESE STATUTES YOU SHOULD SEEK LEGAL ASSISTANCE TO PROTECT YOU FROM THE POSSIBILITY OF PAYING TWICE FOR THE IMPROVEMENTS TO YOUR PROPERTY.
(Name and address of lien claimant)
(Name and capacity of party signing for lien claimant)
(Address of party signing)
Note that all the blanks in the form above must be filled in. Ohio preliminary notices and mechanics liens are often declared invalid if they have missing information.
Also, note that the preliminary notice must be served on the property owner ideally within the first 21 days of the date when you started furnishing labor or materials to the project.
The acceptable methods for serving the Ohio preliminary notice include certified mail, registered, personal delivery (with a signed acknowledgment of receipt), and other methods specified in Section 1311.19 of the Ohio Code.
What happens if you fail to serve a preliminary notice in Ohio?
In Ohio, failing to serve a valid preliminary notice means you lose your lien rights over the project at hand. However, you are still technically allowed to serve a preliminary notice beyond the 21-day deadline. An Ohio mechanics lien may cover the work that you performed starting from 21 days prior to the date when you served your preliminary notice.
If, for example, you served your Ohio preliminary notice on August 1, the services that you furnished starting from 21 days prior to August 1 up to the end of your work on the project are lienable. If you want to protect your full lien rights, you should serve your Ohio preliminary notice within 21 days of your first day of work.
How to file a mechanics lien in Ohio
1. Prepare your Ohio mechanics lien form
The following details must be included in your Ohio mechanics lien form:
- Name of county where the property is located
- Name and address of the lien claimant
- Name and address of the property owner
- Name and address of the party who hired you for the project
- Dates of first and last day of furnishing services to the property
- The legal property description of the project’s location
Section 1311.06 includes an Ohio mechanics lien template that you must use:
Note that an Ohio mechanics lien must be notarized prior to filing.
2. Record the Ohio mechanics lien
When your Ohio mechanics lien template is all filled in and notarized, it should be ready for filing.
There are two deadlines for filing an Ohio mechanics lien depending on the type of project you are working on:
- For residential projects, your Ohio mechanics lien must be filed within 60 days of the date when you last furnished labor or materials to the project
- For all other project types, your Ohio mechanics lien must be filed within 75 days of the date when you last furnished labor or materials to the project
Filing an Ohio mechanics lien is done in the clerk’s office of the county where the property in question is located. You can file your mechanics lien by walking into the clerk’s office in person or by mailing your Ohio mechanics lien forms.
Note that filing a mechanics lien isn’t free, so you must be ready to shoulder the filing costs. If you are filing by mail, make sure that you include the exact amount in your parcel. You can call the county clerk’s office prior to mailing your mechanics lien to know how much you need to pay to have your lien recorded.
It is also a good business practice to prepare two copies of your Ohio mechanics lien: one for filing and another for your own records. The second copy may also be used when you complete Step 3.
3. Serve a copy of the Ohio mechanics lien on the property owner
As required by Section 1311.07 of the Ohio Code, you must serve a copy of the recorded mechanics lien on the property owner or the lessee. Serving a copy of the Ohio affidavit of lien must be done within 30 days of the filing date.
You can serve the copy of your Ohio mechanics lien on the owner via certified mail, registered mail, or any other method allowed by Ohio state laws.
4. Enforce/release the mechanics lien
After filing your mechanics lien in Ohio and serving a copy of it on the property owner, you’re pretty much done! All you need to do is wait for your payment to come.
Once the mechanics lien is satisfied and you receive your payment, you have to release the mechanics lien by filing a release of lien in the same county clerk’s office where you recorded the original lien. This clears the property of any lien records since your payment has already been settled.
Note that if you fail to release an Ohio mechanics lien after it has already been satisfied, you can be liable for damages incurred on the owner. Releasing an Ohio mechanics lien is an important step that you must not forego.
If, unfortunately, you get the sense that the property owner is not willing to settle the payment debt, your other option is to enforce your mechanics lien. When you enforce an Ohio mechanics lien, you file a foreclosure lawsuit so you can recover your payment through the property’s foreclosure sale.
If a property owner sends you a Notice to Commence Suit, you are to enforce the mechanics lien within 60 days of the date when the notice was served. If a property owner does not serve you a Notice to Commence Suit, you have six years after filing the mechanics lien to initiate a foreclosure lawsuit.
Failing to enforce a mechanics lien within the applicable deadline permanently nullifies your mechanics lien on the property.
Best practices when filing a mechanics lien in Ohio
1. Serve a preliminary notice even if a Notice of Commencement is not recorded
In Ohio, parties with no direct contract with the owner must serve a Notice of Furnishing, but only if the property owner records a Notice of Commencement. However, it is still best practice to serve on the owner a Notice of Furnishing even if they fail to file a Notice of Commencement.
Serving an Ohio preliminary notice can assist owners in tracking which parties are working on their property. Consequently, you might get paid quicker if the property owner knows about your participation in their project.
2. Prepare two copies of your Ohio mechanics lien form
Make sure that you have at least two copies of your Ohio mechanics lien form when you have it recorded in the clerk’s office. One copy gets filed, while you can keep the other for your own records and also so you can give a copy of the mechanics lien to the property owner. Keep in mind that notifying a property owner about your mechanics lien is a legal requirement in Ohio.
3. Serve a Notice of Intent to Foreclose before enforcing your Ohio mechanics lien
Before you initiate a lawsuit to foreclose a property, you might want to first serve the property owner a Notice of Intent to Foreclose. This notice informs the property owner that you are planning to enforce your mechanics lien, which could prompt them to finally pay up. Serving a Notice to Foreclose could, therefore, get you paid without having to go through the costly process of filing a lawsuit.