Can a Subcontractor File a Lien After the House is Sold?

Full Question:

Can a subcontractor who worked on a single family home for a builder place a mechanic lien on the property after the builder has conveyed the property to an individual who had no knowledge the subcontractor was not paid for his work.
01/13/2012   |   Category: Contractors ยป Construction...   |   State: Massachusetts   |   #25588

Answer:

The answer will depend on whether a notice of lien was filed as described below before the house was sold. There are several types of liens, all of which could cloud the title and prevent the seller from conveying marketable title to the buyer. A judgment lien is created when a court grants a creditor an interest in the debtor's property, based upon a court judgment. A judgment lien can be filed if an actual judgment in a lawsuit is obtained from a court. Such cases include failure to pay a debt, including credit cards, bank loans, or deficiency judgments on repossessed vehicles. In some circumstances, judgments can be enforced by sale of property until the amount due is satisfied. A plaintiff who obtains a monetary judgment is termed a "judgment creditor." The defendant becomes a "judgment debtor." secure payment of the claim to the injured party. After the judgment creditor places a lien upon the attached property, the next step in the collection process is to conduct a sale of the attached property to satisfy the judgment debt.

Liens that arise in construction situations include construction liens, contractor liens, mechanic liens, attorney liens, architect liens and other liens applicable in your state. By virtue of express statutes in most states, mechanics and material men or persons who furnish materials for the erection of houses or other buildings, are entitled to a lien or preference in the payment of debts out of the houses and buildings so erected and to the land, to a greater or lessor extent, on which they are erected.

In order to file a mechanics lien for labor performed to improve, construct, or repair property in Massachusetts, the answer will depend in part on the time periods involved. A notice must be filed not later than the earliest of:

(i) sixty days after filing or recording of the notice of substantial completion, or
(ii) ninety days after filing or recording of the notice of termination, or
(iii) ninety days after such person or any person by, through or under him last performed or furnished labor or materials or both labor and materials.

Upon filing or recording a notice, as hereinbefore provided, and giving actual notice to the owner of such filing, the subcontractor shall have a lien upon such real property, land, building, structure or improvement owned by the party who entered into the original contract as appears of record at the time of such filing,


The following are MA statutes:

G.L.c. 254, § 2. Written contract; notice.

Section 2. A person entering into a written contract with the owner of
any interest in real property, or with any person acting for, on behalf
of, or with the consent of such owner for the whole or part of the
erection, alteration, repair or removal of a building, structure, or
other improvement to real property, or for furnishing material or rental
equipment, appliances, or tools therefor, shall have a lien upon such
real property, land, building, structure or improvement owned by the
party with whom or on behalf of whom the contract was entered into, as
appears of record on the date when notice of said contract is filed or
recorded in the registry of deeds for the county or district where such
land lies, to secure the payment of all labor, including construction
management and general contractor services, and material or rental
equipment, appliances, or tools which shall be furnished by virtue of
said contract. Said notice may be filed or recorded in the registry of
deeds in the county or registry district where the land lies by any
person entitled under this section to enforce a lien, and shall be in
substantially the following form:

 


Notice is hereby given that by virtue of a written contract dated
___________, between ______________, owner, and ____________,
contractor, said contractor is to furnish or has furnished labor and
material or rental equipment, appliances or tools for the erection,
alteration, repair or removal of a building, structure, or other
improvement on a lot of land or other interest in real property described
as follows:

 


(INSERT DESCRIPTION)

 


Such person may file or record the notice of contract at any time after
execution of the written contract whether or not the date for performance
stated in such written contract has passed and whether or not the work
under such written contract has been performed, but not later than the
earliest of:

(i) sixty days after filing or recording of the notice of
substantial completion under section two A; or
(ii) ninety days after
filing or recording of the notice of termination under section two B; or


(iii) ninety days after such person or any person by, through or under
him last performed or furnished labor or materials or both labor and
materials.

 

G.L.c. 254, § 5. Enforcement of lien; procedure.

 


Section 5. A lien upon land for the erection, alteration, repair or removal of a building or other structure or other improvement of real property or for professional services relating thereto or a lien established under section seventy-six of chapter sixty-three, or section 6 of chapter 183A shall be enforced by a civil action brought in the superior court for the county where such land lies or in the district court in the judicial district where such land lies. The plaintiff shall bring his action in his own behalf and in behalf of all other persons in interest who shall become parties. An attested copy of the complaint, which shall contain a brief description of the property sufficient to identify it, and a statement of the amount due, shall be filed in the registry of deeds and recorded as provided in section nine within thirty days of the commencement of the action, or such lien shall be dissolved. All other parties in interest may appear and have their rights determined in such action, and at any time before entry of final judgment, upon the suggestion of any party in interest that any other person is or may be interested in the action, or of its own motion, the court may summon such person to appear in such cause on or before a day certain or be forever barred from any rights thereunder. The court may in its discretion provide for notice to absent parties in interest. The terms "party in interest" and "person in interest", as used in this chapter, shall include mortgages and attaching creditors.