What happens to your right to file a mechanic’s lien when the owner sells the property?

You are a contractor and you provide labor and material and you are not immediately paid for your work. You can file a mechanic’s lien, but you figure you have plenty of time, realizing that you have 8 months from the last date of furnishing labor or furnishing material on commercial projects to file the lien. But then the owner of the project sells, before you file your lien. Is it too late to file the lien?

In this situation while you can file the lien, you may not be able to foreclose it. Deeds usually contain a statement which provides that the seller will hold the sales proceeds as a trust fund to be applied first for paying for the cost of the construction. If the deed has such a statement, then subject to a few exceptions, you can’t foreclose on it.

If you are owed money for your work on a project, carefully consider all factors before you decide to wait to file the mechanic’s lien.

Please note this blog is not legal advice. It is intended as educational material. For your specific issue you should seek legal advice from an attorney.