There are certain questions clients of Smiley Law Firm ask our attorneys often. One of the most common questions is how to remove a mechanic’s lien on property here in Louisiana. Each state that we practice such as Texas and California have similar mechanisms but this post will focus on removing a mechanic’s lien from property in Louisiana.
We see certain fact scenarios all the time and my goal of this post is to describe the various types of situations that we encounter and then offer a step-by-step process on how to go about removing the lien.
Remember, a mechanic’s lien has nothing to do with automobiles or repairing of any type of motor vehicle. So you may want to stop reading now if you are looking for something related to items in this picture that are moving.
Mechanic’s lien removal is a complicated process and should only be handled by an experienced attorney. I often get calls from other attorneys who do not understand the process asking for help because a lien or mechanic’s lien is filed on their clients property. My point is that even licensed attorneys have problems with the lien removal process, therefore, it is not smart to handle this without proper guidance from a construction law attorney.
What is a mechanic’s lien?
First, we need to discuss briefly a lien. A lien, mechanic’s lien, bond claim, sworn statement of amount due, lien affidavit or statement of claim and privilege are all terms of art for a document which is filed in the public record which clouds the title of a property.
A lien is a security instrument. Contractors, subcontractors, laborers, equipment suppliers and building material supply companies file liens when they are not paid on a project for the work, services, materials or equipment supplied to a particular job.
I joke and say that “lien” is a four-letter word in the construction industry.
For some reason, contractors and suppliers hate securing the right to be paid for the work performed. I sure know that banks like to secure loans that they give out, so why doesn’t a contractor want to be paid for work performed?
Regardless, there are many instances where liens are filed and they are invalid for a number of reasons. Many of the reasons have absolutely nothing to do with the facts of the matter or whether one party is right or wrong.
Below are some example forms of liens that we file here in Louisiana. They are blank but they show the differences in the information needed to file a mechanic’s lien.
Real life scenarios
So, in order to understand the process of removing a mechanic’s lien on property you own, you need to understand some of the reasons why people encounter liens in the first place. Below are some examples that we see regularly.
Contractor Does Work And Then Files A Lien
The most common scenario we encounter is the contractor who performs work on a project and then is not paid by the homeowner, developer, or contractor. The quality of the work does not matter here regarding the validity of the lien.
Good work – if the contractor performs work well and is not paid, then the contractor has a right to file the lien based on the work. However, even if good work, we have had liens removed because the contractor either tried to file the lien himself/herself or they went through a service which did not meet all the legal requirements.
Bad work – more commonly, we see the contractor did not perform quality work and was fired or run-off the job. If terminated properly by the hiring party or owner, then the lien period could start sooner than the normal substantial completion mark. It is very important to properly terminate your contractors so that the lien clock starts to tick.
Contractor does work, is paid by the owner, and does not pay the subs and vendors. The subs and vendors file a lien
The scenario where a contractor does not pay the subcontractors or suppliers is one we see much more often.
Say if you are a homeowner and you pay your general contractor for work performed by a number of subcontractors. Then either the general contractor does not pay a subcontractor or that subcontractor gets paid and does not pay other subcontractors or suppliers.
This is the secret lien. Secret because the homeowner does not know of the possible claim.
Situations like this are the reason why notices exist in most jurisdictions. As a homeowner or developer, you have no idea that a random lumber company or equipment rental company may have lien rights on your project. These parties are required to send you notice before filing a lien.
The liens in this scenario can be costly as well because owners or general contractors may have to double-pay in certain circumstances. The only recourse is to go after the non-paying party and get your money back. This is not a recipe for success. That money is long gone.
If these liens are invalid, we can have them removed by the mandamus process mentioned below.
You buy a property and during the title search, a lien is discovered.
Another scenario that we see here at Smiley Law Firm pretty often is when a property owner buys a property and there is a lien filed and clouding the title of the property. This can happen if you are the seller or the buyer. I have seen it be an issue both ways.
If you are the seller of the property and a mechanic’s lien is found when title a title search is conducted, then you only have a few options and time of the essence.
- There is the ability to have the lien removed due to prescription if the lien is more than a year old.
- There is the option of bonding around the lien. Here in Louisiana, there is the option to bond off the lien for 125% of the total value. This is costly but a quick option.
- Then finally you can file a mandamus as described below to have the lien removed due to a technicality.
All three are options that should be weighed and depending on the facts an attorney can help you find out the best option for your situation.
If you are the buyer, you purchase the property and later when another title search is completed, a lien is found. This happens! There are a few options here as well.
- You can put the title insurance on notice of the issue and they should work to have the lien removed.
- You can contact the seller and insist they remove the lien or pay to have it removed.
- Finally, you can have the lien removed yourself by this mandamus procedure if the lien is invalid.
Any options in these situations should be shared with a competent construction law attorney to discuss the ramifications. It all depends on the other parties and the time frame needed to have the lien removed.
A crazy person is mad at you so they go and file a lien on your property
In New Orleans, we see this scenario all the time. This, for lack of a better term, crazy person typically disregards the law and maliciously tries to file liens in order to extort money from the property owner. We see instances where alleged work is embellished or just a flat-out lie. Other times people will file a lien just because they know it will come up when the property is sold.
The lien could be on the property for just about any reason. Most times the lien filer does not know the rules and the lien is invalid. The clerk of court in the mortgage office has to file the document and cannot remove it without formal request from the filer or court order.
The key here is to tread lightly with these people. They use the law to their advantage and try to scam good people out of money. There are other ways to fix this situation and get a little justice. Contact Smiley Law Firm today to schedule a consultation. We see this all the time and can help.
What is the process to remove a mechanic’s lien on property?
There are basically four ways to have a lien removed. The key difference here is between voluntary and involuntary methods of removal.
- Request removal due to prescription
- Letter requesting removal
- Mandamus proceeding to remove the lien by court order.
If you can get the opposition to remove the lien without legal involvement, this is by far the best way to handle any lien removal. Yes, I’m talking myself and my firm out of a job here.
The first three methods above are self-explanatory but I will go into a little detail for those unfamiliar with the legal process
If you know someone or some company has filed a lien you can reach out to them directly either by phone, email, or letter to request they remove the lien. Many times you may have to give them money or something else to remove the lien. The give and take is the negotiation process.
If you reach a deal, always put the agreement in writing. It is best to consult an attorney to make sure the agreement is solid, but if you do not want the extra expense, please put the agreement in writing. I can’t tell you how many times I see people who did not put a deal in writing and there are consequences.
Request removal due to prescription:
This happens when the lien is more than one year old, in Louisiana, and some clerk’s offices will allow a cancellation to be filed and recorded due to prescription. Unfortunately, not all clerks of court will cancel due to prescription.
Prescription is Louisiana’s version of common law concept of statute of limitations. Many times there is a form for this and the filing fee is nominal $100-$200 for the cancellation. Again, you will want to consult an attorney to see if the document you try to file will accomplish your goal of having the lien removed.
Letter requesting removal:
We send hundreds of lien removal letters (see below as to why) and they almost never work to have the lien removed. However, you may be able to include other items in the letter that may convince the lien filer to remove the lien.
You may show them the dreadful outcome if the lien stays on and sometimes that is enough to get the lien filer to cancel the lien. Sometimes here means rare.
Mandamus Proceeding To Remove The Mechanic’s Lien By Court Order
Ok, here is the part of the post where I will get more technical and legal. I need to do this because the process is technical and needs an experienced lawyer to carry out.
In Louisiana, both the Private Works Act and the Public Works Act have a mechanism to remove liens. For the Private Works Act La R.S. 9:4833 and the Public Works Act La R.S. 38:2242.1 discuss the lien removal letter and Mandamus action required to have the lien removed. Here at Smiley Law Firm we deal with both public contracting and private works act claims on a daily basis.
Send the 10 day lien removal letter. Ensure delivery. List out all the legal reasons why the lien is invalid. If you do not include these, then you may not be able to collect attorney fees if successful with the mandamus proceeding.
Wait 10 days. Maybe the opposition will cancel the mechanic’s lien voluntarily, but we rarely see this in practice.
Here is an example of the first page of a mechanic’s lien removal letter that my office uses to send out to an opposing party. There are a few more pages to this document, so you can tell that these letters are complex due to the length.
Research, draft and file the Petition for Writ of Mandamus in the court of the parish where the lien was filed. It has to be in district court and the parish where the property is located. Get a Rule date from the court, which means you have to walk the Petition through to get a signature from the judge and date of the hearing.
Work on service of the Petition. Time is tight here due to the nature of the summary proceeding. Summary Proceedings in Louisiana are codified starting with La CCP 2591 – 2596.
This is where things start to get tricky. Service of the Petition and Rule to Show Cause, according to La CCP 3782 “shall be assigned for hearing not less than two or or more than ten days after the service of the writ” of Mandamus.
So the procedure is reverse here. The clerk of court has no way of knowing when the Writ of Mandamus Petition will be served. Therefore, as the attorney, you need to advise the clerk’s office and Judge’s chambers to select a date for the trial around ten days out.
Why ten days? Because that will give your special process server time to have the defendants served with the Writ of Mandamus and have the two days required before the hearing. Again, there is a lot to be coordinated here.
Best practice tip, we never rely on the sheriff for service here. We end up having to file an affidavit and Motion to appoint a special process server contemporaneously with the Mandamus so we can ensure timely service. See La CCP 1293. Otherwise, we need to push the date of the hearing back so that we can get timely service of process on both the defendant who file the lien and the clerk of court for the parish.
Prepare for the trial on the merits. This is an evidentiary hearing that can involve live testimony and document evidence submitted into the court record as exhibits. Many times, live testimony is not needed, but some judges like documents and stories to be verified on the record rather than an affidavit exhibit.
If successful, the Judge will rule in your favor and order the lien cancelled on the spot. There are times a judge may take the ruling under advisement, although this is rare. A good attorney will have a judgment prepared for when the judge rules in the attorneys favor. This make the Judge’s job easier and ensures that your lien will be cancelled right away.
From there, you take your signed judgment or order from the Judge over to the Mortgage office for the parish. Once you pay the cancellation fee and present your order, the Clerk of Court will cancel the lien while you wait.
This, in a nutshell, is how you have a mechanic’s lien on your property removed from the title. This process can take weeks to complete usually under 12 weeks. The process is supposed to take less than 30 days from start to finish but due to weekends, holidays, court delays and human nature, the process usually takes about 60-90 days. The process could also take up to 50 hours of billable time to complete between the attorneys time, non-attorney staff time and coordination of these delicate events.
The lien removal process by use of the Wirt of Mandamus summary proceeding is the only way to force the lien from the property in a fast time period. If you file suit and wait for an ordinary proceeding then the process could take 2-3 years to complete and cost tens of thousands of dollars in attorney fees, if you are successful.
One final note, here at the Smiley Law Firm, we carefully analyze the lien in the beginning to determine if we have a good argument supporting the lien removal. If there are no legal grounds, we will not take the case and advise that the lien is valid on its face and the Mandamus proceeding is not the proper vehicle to remove the mechanic’s lien on the client’s property.
Construction law is our bread and butter, we handle scenarios like the one described herein all the time. Mechanic’s lien removal from a property is a powerful tool. This allows a client to get their property back unencumbered by an improper lien. Then the client is free to sell or mortgage the property as they wish, the property can freely enter the stream of commerce once again.
Please leave comments below if you have had success with removing a mechanic’s lien on property you own or if you currently have a lien on your property. We always welcome the insight of others.