Maryland Mechanics Liens - Strategic Considerations
With private commercial work on the uptick, we are seeing more mechanic's liens. While the lien process is relatively straight-forward in DC and Virginia, it is much more complicated in Maryland.
In Maryland, a mechanic's lien does not attach at the commencement of the work or the filing of a lien action. Instead, a contractor, subcontractor, or other claimant must file a complaint, present evidence at a "show cause" hearing in circuit court, and (usually) prevail at a full trial on the merits to establish a lien. This much more intensive process was established as a result of the decision in Barry Properties, Inc. v. Fick Bros. Roofing Co., 277 Md. 15, 353 A.2d 222 (Md. 1976), and can take 14 months or more to complete.
Below is a summary of key aspects of Maryland's mechanic's lien process.
Notice Requirements
Subcontractors, suppliers, and their lower tiers (but not prime contractors) must provide notice of their intent to file a petition to establish a lien within 120 days after their last day of work. Failure to provide notice is fatal to the claim, and is aggressively enforced by Maryland courts. The Maryland Code prescribes a form of notice, which requires several mandatory data items.
Filing of Petition To Establish Lien
Any party seeking a lien must file a petition to establish a lien within 180 days of that party's last day of work. The petition must include "all material papers" necessary to prove the lien. As a result, for any sizable lien claim, these filings typically include hundreds or even thousands of pages of documents. There are also specialized requirements for certain types of projects, such as condominiums and renovations. Failure to file the petition within the 180 day period is fatal. The petition is filed in the circuit court for the county where the project is located.
Show Cause Hearing and Trial
Assuming the filed paperwork is in order (which is not always the case), the court is supposed to issue a show cause order directing the owner of the property to file an answer under oath, typically within 15 days of the order. The order is also supposed to provide for an evidentiary hearing within 45 days of the order. Most of the circuit courts are good about...
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