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What is a mechanic’s lien?
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Mechanic's liens exist to provide collection rights to contractors and material suppliers who supply construction services or materials for improvements to real property. Waiver-of-lien forms provide protection for homeowners who pay their home improvement bills.
With a mechanic's lien, the concrete supplier or concrete contractor has the right to serve the homeowner with notice of lien and to record it as part of the county land-title records, should payment not be made for materials or services provided.
A lien is a claim of partial ownership of your home. If the mechanic's lien is not paid, the material supplier or contractor can commence court proceedings to foreclose the lien and sell the property in payment of the obligation. Wisconsin law requires the material supplier or concrete contractor to follow an exacting series of notices of intent, claims, and summons, each within a specific time frame, to foreclose the mechanic's lien. If the material supplier or concrete contractor do not follow the rules, or meet the deadlines, they relinquish their lien rights, but can pursue other methods of collection.
A waiver-of-lien form provides a homeowner proof that subcontractors and material suppliers have been paid and relinquish their right to serve the homeowner with a notice to place a lien the home. Wisconsin law preserves a homeowner's right to receive a waiver-of-lien from suppliers and subcontractors before paying the builder or concrete contractor for materials or construction services.
Neeck Concrete Products LLC recommends homeowners withhold payment for concrete construction materials and services rendered until their concrete contractor provides a signed waiver-of-lien. Concurrent with payment, or upon receiving a signed project trust receipt from the concrete contractor, Neeck Concrete Products LLC will relinquish its mechanic's lien rights and provide a signed waiver-of-lien for homeowners.
The case history that follows, taken from the Wisconsin Department of Agriculture, Trade, and Consumer Protection web site, explains why lien waivers are important to homeowners.
Mechanic's Lien Case History:
Mr. Jones signed a contract with ABC Contractors for the construction of an addition to his home. When the work was done, Jones paid the contracted price and started enjoying his new addition. A month later, he received a "Notice of Intent to File Claim for Lien" in the mail from the lumberyard where ABC Contractors obtained building materials.
What happened? Although Jones had paid his bill, ABC Contractors did not pay the lumberyard. The law allows a subcontractor or supplier of materials to place a lien on the property where the work was done, if the contractor doesn't pay his bills. This can happen even if the homeowner has paid the contract in full.
To protect against similar circumstances, homeowners undertaking residential concrete projects should insist on being given completed waiver-of-lien forms from the concrete contractor and each subcontractor and material supplier used on their concrete project, anytime they make payment.
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