Mechanics Lien and Bonds

Providing The Best In Class Service Options For Today's Construction Credit Professional

NACM Connecticut in partnership with our National Office provides Mechanic Lien and Bond Services to its membership.

A Mechanics' Lien is an effective remedy for contractors, subcontractors, and others involved in the construction or improvement of real estate to resolve payment problems. The mechanic’s lien legally ties a supplier or subcontractor to the deeper pockets of the owner by using the owner’s property as collateral. If a subcontractor or materials provider records a Mechanics' Lien against the real estate being improved, the owner cannot sell or refinance the property without first paying off the debt secured by the lien. In addition the claimant has the right to proactively foreclose the property to get paid. A Mechanics' Lien motivates the owner to make sure the contractors get paid, and is a prerequisite to filing a foreclosure action on the property.

 

Preliminary Notices
Each state has its own lien (private construction) and bond (public construction) statute. Each statute contains time frames for serving preliminary notices, filing and foreclosing liens and bonds. Claimants who do not have a direct contractual relationship with the owner (e.g., subcontractors), in 35 of the 50 states, must take "Step 1" the Preliminary Notice. This ensures that the owner is aware of a potential claimant, so that appropriate steps can be taken to confirm that the contractor is paid. Preliminary Notices must generally be provided to the owner and general contractor.

Mechanics Liens
"Step 2", the Mechanics' Lien is available to almost anyone who contributes labor, services, or materials to a real estate improvement project. A Mechanics' Lien is a step used to initiate payment out of the real estate itself by placing a lien on the property, making it difficult for the owner to sell or refinance the property, and if necessary, allowing the lien holder to take "Step 3" Foreclosure or in other words allow the claimant to go to court to have the property sold at auction.

The Lien Navigator
NACMs national office's web-based service, the Lien Navigator, is the credit professional’s authoritative guide to notice, lien, payment bond and suit time requirements for all 50 states and Canada. Credit professionals can rely on the Navigator to determine when and how action needs to be taken to protect lien rights across the 50 states, DC and Canada so to ensure that you’ll always have current information. Click here to find more information about the Lien Navigator on NACM's National website.