Nailed

Nampa, ID – Black’s Law Dictionary (6th Edition) defines “mechanics lien” as:

“A claim created by state statutes for the purpose of securing priority of payment of the price or value of work performed and materials furnished in erecting, improving, or repairing a building or other structure, and as such attaches to the land as well as buildings and improvements erected thereon.”

Here in Nampa, a suburb of Boise, a young couple bought this new home in the Maplewood Estates subdivision. Title policies were issued to the lender and to the owner.

Soon, the new owners and their neighbors heard that the developer had filed bankruptcy. Worse, subcontractors and suppliers had gone unpaid, and the new homes were being hit with mechanic’s liens. Even though they were recorded after homes were completed, by state law the lien claims had priority over the interests of the new owners and lenders.

In all, this home was hit with 21 mechanics’ liens, for everything from plumbing and windows to landscaping. The liens would soon be followed by lawsuits, to enforce them by forced sale of the property.

The title insurance policies paid $24,971.00 to settle claims and lawsuits against this home.

MORAL:The risk of mechanics’ lien claims is very real for many property owners. The liens can arise from repairs to existing structures, as well as new construction. Not all title policies provide coverage against mechanics’ lien claims. Owners should always inquire, and make sure they’re getting the most comprehensive coverage available