Frequently Asked Questions - Indiana Mechanics Lien
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What is an Indiana mechanics' lien Claim?
At its core, an Indiana mechanics lien is protection for unpaid amounts due and owing to contractors, subcontractors and suppliers that performed work or delivered materials to construction projects. The purpose of the Indiana mechanics lien statutes is to ensure that improvements to real estate are paid for, either through the normal course of progress payments or through the sale of the real estate itself. When a lien is filed on a property, the property itself becomes subject to sale by the lienor, who is then paid out of the proceeds. To avoid this, most owners will attempt to resolve the construction lien, thereby avoiding an inevitable lawsuit to foreclose on the property. In Indiana, liens filed on private property or on funds relating to a public project are known as Mechanic's Liens. When an Indiana construction lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property. Indiana mechanics liens filed with regard to public projects attach to the funds held by the public owner.
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Who can file an Indiana mechanics' lien Claim?
Because Indiana's mechanics lien law was designed to protect those who provide labor or materials for the improvement of real estate, contractors, as well as subcontractors, design professionals, sub-subcontractors and material suppliers can file an Indiana mechanics lien. Complying with the rules relating to the filing of a lien on a property is important, though, because failure to properly file a lien claim will result in it being invalid. Indiana requires strict adherence to lien filing requirements, including sending prelien notices if necessary.
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Are pre-lien notices for an Indiana mechanics' lien Claim required?
It is critical that preliminary notices of furnishing be provided to the owners in order to keep the project running smoothly. We strongly recommend providing Indiana preliminary notices on every project at the commencement of work in order to make the owner aware that work is being performed by you. With regard to required notices, within 30 days from beginning alteration or repair work on a single or double family, owner occupied residence, a claimant must provide he owner with a Notice of Furnishing of Labor, Material or Machinery. Within 60 days from beginning original construction work on a single or double family residence, a claimant must provide notice to the owner that they are supplying labor or materials.
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When should an Indiana mechanics' lien Claim be filed?
The filing of a notice of intention to hold a mechanics' lien in Indiana for a commercial project must be completed within 90 days after the day on which the lien claimant last performed labor or furnished materials. The filing of a notice of intention to hold an Indiana mechanics' lien for a residential project must be completed within 60 days after the day on which the lien claimant last performed labor or furnished materials. In Indiana, a mechanics lien or "statements of claim" on most public projects must be filed within 60 days after the date of last labor performed, last materials furnished, or last services rendered by the claimant.
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How much does it cost to file an Indiana mechanics' lien Claim?
LienItNow.com prepares, files and serves Indiana mechanics' liens (which includes a written notice of intent to claim a lien, if necessary, as well as a verified statement of lien) for a fee of $290.00. Pre-lien notices are not included in the $290.00 price, but can be filed for a fee of $50.00.
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Do I need a written contract to file an Indiana Mechanics Lien?
No, you do not need a written contract to file an Indiana construction lien. Oral contracts are sufficient if you have sufficient documentation to show the existence of an agreement or that you performed the work for which you are filing an Indiana mechanics lien claim.
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How does filing an Indiana mechanics' lien Claim help me get my money?
On a private project, the Indiana mechanics' lien places an encumbrance on the property that makes it difficult to resell or re-finance the property without first removing the construction lien.
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What is an Indiana Stop Notice and why should it be filed
LienItNow.com prepares and serves Indiana Stop Notices for a fee of $125.00. A Stop Notice is a notification that has the ability to enhance the effectiveness of a mechanic's lien. A Stop Notice, or a notice to withhold funds, is sent to the company that is financing or funding the construction funds for a project. Once that company receives the Stop Notice, that company has notice that it should withhold sufficient money to satisfy the stop notice claim. The purpose of the Stop Notice is to provide the lender, financiers or funders of the construction project notice that there is money owed to a contractor, subcontractor or supplier so that an inquiry can be made as to why that money is not being paid.
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What is an Indiana Amendment to a mechanics' lien Claim?
LienItNow.com prepares, files and serves Indiana Amendments to mechanics' lien Claims for a fee of $250.00. Amendments to a mechanics' lien claim are often needed when something about the claim changes. Common changes to a lien claim are increases or reductions in the amount due to the lienor, or a change to the last date of work.
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When should an Indiana Discharge of mechanics' lien claim be filed?
If you are at the point that an Indiana lien release can be filed, that means payment has been made or the mechanics lien has been otherwise resolved. When a mechanics lien is no longer needed, the lien release is the final step, and is required to remove the property lien from the land records. Until a lien discharge is filed in Indiana, the lien on the property will stay and continue to encumber the property title, making it difficult to sell, transfer or obtain financing. If a lien release is needed, LienItNow.com prepares, files and serves Indiana Discharges of mechanics' lien Claims for a fee of $85.00. Once the lienor has been paid the amount contained in its lien claim, or has come to an agreement that requires the lien claim to be removed from the property records, a Discharge of mechanics' lien Claim should be filed.
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How much does it cost to file an Extension of a mechanics' lien Claim?
LienItNow.com prepares, files and serves extensions of mechanics' lien Claims for a fee of $85.00. All lien claims expire after a certain period of time, and filing an extension of the mechanics' lien claim prolongs the expiration date. Indiana law, however, does not permit an extension of mechanics' lien claims.
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Can I file a Bond Claim on an Indiana Project?
LienItNow.com prepares, files and serves Indiana Bond Claims for a fee of $275.00. Bond claims can only be filed on a project where the owner, contractor or subcontractor has obtained a payment bond to ensure that every contractor receives payment for the work performed on the Project. The payment bonds issued by sureties for construction projects have specific timing requirements, but most require claimants to submit claims against the bond within sixty to ninety days from the claimants' last date of work. Bond claims are as or more effective than a lien claim because the payment bond acts as a guarantee that payment will be made for work properly completed.
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Do I need to file a Pre-Notice to make a claim against an Indiana payment bond?
LienItNow.com prepares, files and serves Indiana Pre-Notices for bond claims for a fee of $50.00. Depending on the terms of the payment bond, pre-notices may or may not be required. LienItNow.com recommends that, prior to or immediately after starting work or delivering materials to a project, subcontractors and suppliers, file a pre-notice that it is a potential beneficiary of the construction project's bond.
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