Liens - defense tactics
By Michael L. Fortney
Contents
- What happens if the lien is foreclosed?
- What is the procedure to bond off the lien?
- Can I force the lien claimant to "put up or shut up?"
- What happens if I do nothing?
What happens if the lien is foreclosed?
The lien claimant may foreclose on the property subject to the lien by filing a lawsuit in the court where the property is located. Successful lien claimants may get their attorneys fees paid, interest, court costs, and the amount owing under the contract.
What is the procedure to bond off the lien?
The owner (or a contractor responsible for defending lien claims of lower tiered contractors or suppliers), can "bond off" the lien by filing an application with common pleas court to approve a bond in favor of the lienholder in an amount that is double the bond for liens less than $5,000 or one and one-half times the amount for liens over $5,000 . After the bond is approved, the lien is void and the property wholly discharged, and the lien claimant may then proceed against the bond. R.C. 1311.11(C).
Can I force the lien claimant to "put up or shut up?"
The owner, mortgagee, any other person with an interest in real property upon which a lien has been taken, and any contractor who has provided a bond may notify the lienholder to commence suit on the lien by giving written notice to the lienholder (a) at the address of the lienholder shown in the mechanics’ lien, (b) through his agent indicated on the affidavit of lien, (c) or at any later address of the lienholder that has been delivered in writing to the party demanding suit. R.C. 1311.11.
If suit is not commenced within 60 days of the service of the demand to file suit, the lien is void and the property wholly discharged from the lien. R.C. 1311.11(B).
Service of the demand to file suit must be made by the sheriff, but the party demanding suit can request the sheriff to serve by certified mail. If notice is sent by certified mail, serve is complete upon receipt. If service is sent by certified mail, but service is refused, the sheriff can mail a second copy by ordinary mail. Service will be deemed complete upon mailing if the mail envelope is not returned within 14 days with an endorsement showing failure of delivery.
When service of the demand is made, the person who sought serve must record an affidavit setting forth the manner of service and attaching a copy of the demand with proof of service within 30 days after service is completed. R.C. 1311.11(B).
What happens if I do nothing?
If the owner is not planning on selling or refinancing the property, it may not be necessary to bond off the lien or force the lien claimant to commence suit. A mechanic's lien has a limited life. Six years after filing the lien, the lien expires unless the lien claimant has initiated a lawsuit to foreclose the lien.
