Lien Claim Foreclosure

A properly noticed and filed mechanic’s lien must be acted upon within six months to remain valid and enforceable. The lien holder must file suit to enforce the lien within six months of the filing of the notice in the clerk’s office. However, a suit filed by another lienholder on the same property inures to the benefit of all other lienors, who may intervene in the suit in order to enforce their liens. It has been held that the bringing of the suit is necessary to preserve the lien.

The suit should allege all facts necessary to show the existence of a valid lien including the existence of the contract and its terms; the work and material furnished in accordance with the contract; the filing of the account with the proper officer within the time required by law; a description of the property against which the lien is claimed; the name of the owner of the property at the time the work and/or materials were furnished; that the suit was brought within the time required by law; the existence of the debt at the time suit was filed; and when the suit is by a subcontractor that the labor and/or material furnished was in pursuance of the contract with such contractor.

In a suit to enforce a lien, if the owner denies the propriety of the lien, the allegations must be sustained by proof in order to prevail.

If a lien holder prevails in the suit, the court is required to order the sale of the property on which the liens are established or a portion of the property sufficient to satisfy such claims. The court may also issue a personal judgment (decree) against any party against whom the lien may be established.

If it is determined that a lien was invalid, the such decree is not res judicata in an action for breach of contract. In other words, the mechanism for lien enforcement is cumulative rather than exclusive.

As to obtaining a personal judgment, there must be privity of contract or an assumption of liability by the individual sought to be held liable. The mere relation of the parties to the construction project, without more, is an insufficient basis for the assertion of personal liability.

Regarding the sale of the property, it is first necessary to determine the amount of the liens and their priorities, prior to the sale. Further, it has been held error to order more of the property sold than necessary to satisfy the amount of the lien.