In today's Freedom Friday blog and email newsletter, I want to talk about a topic that came up with a prospective client earlier in the week, and unfortunately, I wasn't able to help this prospective client. They were simply too late. But if you're a contractor in the construction industry, especially a subcontractor, or even a general contractor, and you're having trouble getting paid, this article is for you. I want to talk about M&Ms. No, not the candy, but M&M Liens. M&M stands for mechanics and materialmen, and that may not make any sense either, but in today's Freedom Friday blog and email newsletter, I'm answering the question, “What are the basics of M&M liens in Oklahoma?”
So, first of all, what does M&M actually stand for? M&M stands for Mechanics and Materialmen's, and so an M&M lien is a lien on real property for anyone that either performs certain types of labor on property or supplies materials. This covers all sorts of people from a general contractor to a bricklayer, to an electrician, HVAC contractor, plumber, and the list goes on. Anyone who is involved in a construction project, either residential or commercial, may have a right to place a lien on the property to secure its right to payment for the material or the labor provided.
There are certain requirements if you want to enforce your lien rights. The first requirement is what's called a Pre-Lien Notice. If you're involved in a residential construction project, or the value of your lien is less than $10,000, you don't need to do a Pre-Lien Notice, but if you're involved in a commercial construction project, and the value of your lien will exceed $10,000, then you have to file with the County Clerk (the land records) a Pre-Lien Notice and serve it on the original contractor and the owner of the real property where the work was done. In some cases, that may be the same party. The deadline to file and serve the Pre-Lien Notice is 75 days after the last date you worked on the project. The Pre-Lien Notice must have a statement saying it's a pre-lien notice; the name, address, and telephone number of the company with the lien or their representative; the date of supply of material, services, labor or equipment; a description of the supply of material, services, labor, or equipment; the name and last-known address of the person who requested that the company who made the request of the supply of material, services, labor, or equipment; the address, legal description, or location of the real property; a statement of the dollar amount owed for the supply of material, services, labor, or equipment; and a signature of the company claiming the lien, or their representative.
The second requirement to enforce your lien rights is the filing of the lien statement. This is the actual M&M lien that most people think of when they think of a lien that was actually filed. Again, this is filed with the County Clerk (the land records) against the real property where the material was supplied, and/or the work was done as part of that construction project. The lien statement must include certain items, in order for it to be a valid M&M lien. It needs to provide the amount owed and for what items, the names of the owner, the contractor, the person claiming the lien, a legal description of the real property where the work was performed or materials supplied, all of which must be verified by an affidavit. In addition, an affidavit must be included that states the pre-lien notice requirements were followed by the person claiming the lien, as well. Then the lien statement must be filed within four (4) months of the date of last work on the project, or the date of when the materials were last provided, etc.
Lastly, the third requirement to enforce your lien rights is lien foreclosure. This is when you file a lawsuit to enforce your lien. This is why I couldn't help the prospective client who contacted me earlier in the week. You have to file a suit within one (1) year of filing your lien if you want to foreclose on that lien and get paid from a sheriff's sale. Otherwise, you will have to wait, possibly a very long time, for the property to sell before you can get paid. Unfortunately, the prospective client from earlier in the week did wait to long. They filed their lien in July of last year, and it's been over a year, so they're out of luck to file a lien foreclosure suit. I would have been glad to help them, but they just waited too long to file a lawsuit to enforce their lien rights.
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