Limited Liability Company Form

Note: This summary is not intended to be an all inclusive discussion of Maine’s construction or mechanic’s lien laws, but does include basic provisions. What is a construction or mechanic’s lien? Every State permits a person who supplies labor or materials for a construction project to claim a lien against the improved property. While some states differ in their definition of improvements and some states limit lien claims to buildings or structures, most permit the filing of a document with the local court that puts parties interested in the property on notice that the party asserting the lien has a claim. States differ widely in the method and time within which a party may act on their lien. Also varying widely are the requirements of written notices between property owners, contractors, subcontractors and laborers, and in some cases lending institutions. As a general rule, these statutes serve to prevent unpleasant surprises by compelling parties who wish to assert their legal rights to put all parties who might be interested in the property on notice of a claim or the possibility of a claim. This by no means constitutes a complete discussion of construction lien law and should not be interpreted as such. Parties seeking to know more about construction laws in their State should always consult their State statutes directly. Who can file a lien in this State? Maine law permits any party who performs labor or furnishes labor, or materials, for the purposes of erecting, altering, moving, or repairing, a house or building, including a wharf or pier, by virtue of a contract with the consent of the owner, to claim a lien. M.R.S.A. § 3251. How long does a party have to file a lien? The liens mentioned in § 3251- § 3254 may be preserved and enforced by action against the debtor and owner of the property affected by filing an action against the debtor and owner within 120 days after the last labor, services, or materials are provided. M.R.S.A. § 3255. Are liens assignable? Maine statutes on construction liens do not specifically speak to whether liens may be assigned to other parties. Does this State require or provide for a notice from subcontractors and laborers to property owners? Yes. A party that provides labor, materials, or services without a contract with the property owner risks losing his lien if the property owner sells the property. Although Maine law is extremely complex on this issue, as a general rule, when a party provides labor, materials, or services to a property owner without a contract with the owner(hereinafter called subcontractor), that party is generally entitled to a lien for the value of labor, materials, or services provided. However, the owner is entitled to claim as a defense that the subcontractor is only entitled to a lien for the amount of the balance remaining due on the contract between the owner and the principal contractor. This defense only applies, however, to sums paid from the owner to the contractor before the subcontractor files suit or provides a Notice to Owner. This Notice communicates to the owner that the owner has a responsibility to ensure that the subcontractor is paid or the owner may be required to pay the amount due twice. In addition, Maine law states that If a party provides labor, materials, or services, without a contract with the property owner, that owner may use a written notice to deny responsibility for the improvements. However, Maine law allows a party to file a Notice of Furnishing within ninety (90) days after he ceases to provide labor, materials, or services. This Notice will preserve the lien claimant’s lien and must be filed with the register of deeds. Does this State require or provide for a notice from the property owner to the contractor, subcontractor, or laborers? No. Maine statutes do not require property owners to provide notices to contractors, subcontractors, or laborers. Does this State require a notice prior to starting work, or after work has been completed? No. Maine statutes do not require a Notice of Commencement or a Notice of Completion as in some other States. Does this State permit a person with an interest in property to deny responsibility for improvements? Yes. If labor, materials, or services were not furnished by a contract with the owner of the property affected, the owner may prevent a lien by giving written notice that the owner will not be held responsible. M.R.S.A. § 3252. However, the lien claimant may preserve his lien by filing a Notice of Furnishing. Is a notice attesting to the satisfaction of a lien provided for or required? No. Maine law does not require a party who has had their lien satisfied to provide or file a Notice of Satisfaction. However, please see ME-08-09 Release of Lien as an example of a form that could be used by a lien holder to provide a property owner with documentation that the lien has been satisfied after payment in full. By what method does the law of this State permit the release of a lien? As stated above, Maine statutes have no specific provision for the release of a lien. However, please see M.R.S.A. § 3263, regarding the filing of a petition by the property owner requesting that the court order the lien holder to accept a bond and release the lien.