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Who can obtain a mechanic’s lien against residential real estate?

On Behalf of | Jan 13, 2022 | Real Estate/Construction Law

Homeowners and construction professionals are often somewhat suspicious of each other. Most property owners have heard stories about people defrauded by shady contractors who take payments and never do the work, and many construction professionals have been burned at least once by a client who never pays for the labor they perform or the supplies that they provide.

The law in Minnesota allows certain professionals to request a mechanic’s lien against a property if they don’t receive payment in full. A mechanic’s lien effectively prevents a property owner from transferring the property to someone else, selling the property or even refinancing it. They will have to pay the amount owed on a lien before they could move forward with any of those transactions.

Who can potentially request a mechanic’s lien against residential real estate under Minnesota law? 

All professionals and suppliers may have lien rights

The law about mechanic’s liens in Minnesota makes it clear that any individual or business that provides any of the services involved in building or fixing up a structure, as well as those who provide supplies or materials for the work, potentially have the right to request a mechanic’s lien.

They will typically need to show proof of a contract or their involvement with the project, as well as proof of their labor or the expenses incurred to obtain supplies. The courts will evaluate the financial and contractual records from the work to determine if there is an unpaid balance.

Even if the homeowner has paid the company that they hired and that company failed to distribute those funds to subcontractors, the property owner could still be at risk of a lien on their title.

Mechanic’s liens can compel payment or complicate ownership

If you are a construction professional, securing a mechanic’s lien can help you avoid taking a big loss due to a client refusing to pay in full. If you are a homeowner, those liens can potentially affect your financial stability and your plans.

Whether you want to secure a mechanic’s lien, fight against one or have one removed from the title to your property, it’s important to understand Minnesota law before you try to go to court. Learning about the rules that govern mechanic’s liens will make that an easier process for both homeowners and construction professionals.