h.w 3 - A contractor's lien, often known as a mechanic's...

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A contractor's lien, often known as a mechanic's lien, or a construction lien, is a claim made by contractors or subcontractors who have performed work on a property and have not yet been paid. The priority of liens on a construction project does not depend upon the time of completion of the particular job, but rather everything relates back to the first visible commencement of the work. Mechanic’s liens are available to almost anyone who contributes labor, services, or materials to a real estate improvement project. The placing of a mechanic lien on a property makes it difficult for owners to sell or refinance the property. In the U.S, different states have different laws and regulations regarding the requirements, obligations, liabilities and forms of recovery of a mechanic’s lien. Below, the laws prevalent in Pennsylvania, New Jersey and Delaware are discussed. Pennsylvania Early Action Requirements In order to avoid additional liquidated damages, it’s essential to set a partial defense payment prior to the commencement of the project. Advance lien waiver - it allows subs to sign advance lien waivers for non-residential projects where the general contractor has posted a bond guaranteeing payment for labor and materials provided by subcontractors. Lien waivers – a subcontractor can waive its right to lien on a residential construction project where the contract between the owner and the general contractor is less than one million dollars. It’s important for owners or GC’s to obtain waivers/rereleases for their subs and suppliers during the construction work. No automatic defense for payments - the burden is on the owner to make sure that all subcontractors are paid. Pending liens - any real estate purchaser must be aware that mechanics liens might be filed after a
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This note was uploaded on 11/05/2010 for the course CMGT 460 taught by Professor Alhafira during the Spring '10 term at Abu Dhabi University.

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h.w 3 - A contractor's lien, often known as a mechanic's...

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