When the economy caused the “pause button” to be placed on financing for certain projects, it created a domino effect leading to the filing of many mechanic’s liens, judgments and other problems on those projects. Here are a few things you need to know.
While the laws on mechanic’s liens vary from state to state, having a mechanic’s lien on a property usually only becomes problematic if the owner is trying to “do” something with the property, such as refinance, sell or satisfy a construction lender. If the lienor has not started a lawsuit to foreclose on the mechanic’s lien, it can just sit there and in some instances, will expire after the statutory time period of time has passed, unless it has been extended or an action to foreclose has been commenced. In New York, for example, they last for one year and can be extended for another year. Commencing an action to foreclose on the mechanic’s lien extends it.