As a homeowner in the Buckeye State, your home provides not merely a place to live, but also a valuable asset. You may wish to sell or refinance it over the course of your life. Unfortunately, mechanic’s liens placed on your property can impede these efforts.
Liens are essentially clouds on the title to your home, usually filed by contractors or subcontractors who claim that they are owed money for work done on the property.
Imagine, for example, a roofer who claims that she fixed your roof without adequate compensation, or a brick company that claims it provided siding to your house but was never paid the contract balance. These entities can potentially sue you for breach of contract. But they can also secure their financial interests without immediately filing a formal lawsuit against you in Ohio’s Court of Common Pleas, by filing a simple lien.
What exactly is a mechanic’s lien, and what can you do if one is placed on your Ohio home?
As an Ohio homeowner, you have hopefully never encountered a mechanic’s lien. These legal documents are somewhat obscure, and many homeowners have not heard of them at all.
A lien is a document that gets publicly filed in the Ohio county clerk’s office, in the county where the relevant property is located. Note that there are 88 counties in Ohio; the contractor would file the lien in the county where your home is, not necessarily the county where his or her business is based. Once filed, the lien creates a situation where your home title is subject to the contractor’s stated financial interest in it.
To understand how a lien functions, consider this example: You hire a window company to install new windows in your kitchen in your suburban home in Cincinnati. After the contractor finishes the work, you have a payment dispute. The company tries to charge you $3,000 more than you had agreed to in the original (and unamended) contract, or claims that you asked for additional work, when you did not.
You refuse to pay the additional sum. The contractor could then file a $3,000 mechanic’s lien with the local Ohio county clerk (Cincinnati is located in Hamilton County). This essentially means that anyone who buys your property would buy it subject to owing the contractor that $3,000. This will make it difficult to sell or refinance the property. Contractors therefore use liens as a means of incentivizing property owners like you to settle with them.
In Ohio, the formal title of the mechanic’s lien filing is a “Notice of Commencement.” You can see a model example of the Notice form here. Each of Ohio’s 88 counties may use slightly different versions, though they are all essentially similar.
Under the Ohio statute, the person or entity filing the lien must enter on the document the company’s name, the owner’s name, the location of the property, and the amount of money still due, among other pieces of information. The lienor must also describe the labor or material provided (in other words, how did the contractor improve the property?).
In most situations, you should be able to avoid the nuisance of having mechanic’s liens filed on your property by engaging in a reasonable negotiation with your Ohio contractor before the lien is filed. Liens are typically a sign of frustration and a relationship that has broken down. The contractor believes you are either ignoring payment requests or have no intention of entering into a good faith negotiation.
If your contractor asserts that he or she is owed an extra sum of money, do not just ignore the phone calls or invoices. While you might think that this “strong signal” will convince your contractor to simply go away, the contractor might view it as a sign of disrespect, prompting a lien or a lawsuit or both.
You and the contractor may have a good faith disagreement about whether certain work was part of the contract, or about the quality of that work. Rather than ignoring the issue, have a frank discussion about it, or consider going to mediation.
In mediation, a third-party neutral (often an attorney or individual with experience in the construction industry) can help you and your contractor to negotiate a fair settlement.
In both negotiation and mediation, you should be open to creative settlement strategies. Rather than paying a lump sum of money, for instance, perhaps you could schedule payments over time. Rather than a monetary settlement, maybe you could offer the contractor a public endorsement or reference. Rather than fighting in court, you could offer the contractor discounted payment in exchange for a limited scope of ongoing work. The possibilities depend on the facts of the situation.
Of course, there are legal remedies available to Ohio homeowners to fight a lien after it is filed. However, you are likely to save time and money if you find a way to settle the payment dispute with the contractor. This does not mean you need to give into all of the contractor’s demands, but it does mean that you should keep in mind the costs of legal action and doing your best to avoid it.
If a lien is placed on your property, it will be helpful to familiarize yourself with the statute that governs liens in Ohio. The procedure for the filing of the notice is contained in Ohio Rev. Code Sec. 1311.04.
Like with most states’ lien statutes, Ohio’s lien law is long and complex. It contains many rules and exceptions, depending on the type of property involved and the work performed. But there are some general concepts to remember as you consider responding to a lien filed on your property:
How can you get rid of a lien once it’s filed? There are several strategies to get the lien removed in Ohio. The first, as mentioned, is to negotiate a resolution with your contractor.
A second option is to obtain what's known as a “lien bond,” through a surety company. The bond essentially guarantees payment to the contractor in the amount of the lien if the contractor is successful on the legal claims, but also removes the lien from your property record.
A third option is to petition a court (specifically, the Ohio Court of Common Pleas serving your county) to remove the lien. Your grounds for removing the lien could include that the contractor never did the work that the lien claims, or that the work was already compensated.
You can also attack legal deficiencies in the contractor’s lien. The most common deficiency for Ohio liens involves the strict deadline for filing. The deadlines are spelled out in Ohio Rev. Code Sec. 1311.06. On residential projects, the deadline is only 60 days from when the contractor or subcontractor last provided labor or materials. In other words, if the lienor attempts to file a lien more than two months after their “last date,” you can ask a court to strike the lien.
There is one other important deadline to keep in mind. Under Ohio Rev. Code Sec. 1311.13, mechanic’s liens are valid for six years. This gives lienors six years in which to either settle with the owner or contractor, or file a suit to foreclose on the lien in an Ohio state court. If they do neither, the lien can be stricken as invalid.
Keep these deadlines in mind. Often, busy contractors will sit on their rights for too long, in which case Ohio law will no longer permit their liens to be sustained against your property.
Liens are unfortunately a possible result of Ohio home improvement projects. Homeowners should not be overly surprised if they face a lien filed on their property (or at least the threat of such a filing) during or after their project.
Fortunately, few contractors in the Buckeye State wish to actually initiate litigation against a homeowner in order to foreclose on a lien. Litigation is time-consuming and expensive. Most contractors would prefer to settle with you quickly for a reasonable sum. Keep this leverage in mind as you explore the legal options available to you under Ohio law.
Finally, remember that liens and the laws surrounding them in Ohio can be highly technical. Retaining an attorney with experience in construction or real estate law might be worth your expense, depending on the amount of money in dispute. For more on retaining an Ohio lawyer, check out Guide to Finding an Excellent Attorney.