What Happens When An Ohio Contractor Files An Invalid Mechanic’s Lien Against Your Property?

A mechanic’s lien can be a crucial right that allows contractors, subcontractors, laborers, and material suppliers to receive compensation for work done to improve Ohio real estate. However, establishing a lien does not mean that the contractor will automatically receive the claimed amount. If a lien is filed in error or maliciously, the property owner can dispute the claim.

This could become especially important because the mechanic’s lien may hinder the mortgaging of the property.

When can a mechanic’s lien be invalid? 

Ohio law largely governs liens under Chapter 1311 of the Ohio Revised Code. Claimants must take certain steps to protect their lien rights. The procedure varies by case and party and includes notices, deadlines, and filing an affidavit with specific information.

The lien could then be contested because the claimant failed to follow the correct process. Disputes can also arise over the amount owed, the work performed, or whether the lien was filed within the required deadline.

A lien’s validity is distinct from a contractor’s claims for payment under the contract. A contractor may disagree with payment under the contract but still lack a lien on the property.

How can an Ohio property owner respond? 

Ignoring a disputed lien does not work in most cases. Even if the property owner is certain the lien is invalid, having it on the property title makes selling or refinancing difficult.

Under Ohio law, a provision known as a notice to commence suit exists. Under Ohio Revised Code Section 1311.11, a notice of suit can be served on the lienholder, requiring them to file a lawsuit in court related to the lien. If they fail to do so within 60 days after service, the lien will become invalid, and the property will be relieved of the lien. There are certain requirements for serving and filing a notice. 

Can the lien be removed while the dispute continues? 

Ohio law also allows the use of security in place of a lien. Depending on the claim, you can use a bond, cash, or another form of security. Normally, the law requires security equal to twice the claim, or one and a half times the claim amount if it is over $5,000.

This may be especially useful if the property transaction must be completed before resolving the dispute.

Take action when a lien is disputed 

Disputes regarding mechanic’s liens can get complex due to the numerous procedural provisions set forth by Ohio statutes. Enforcement of mechanic’s liens depends on several factors, such as the type of construction work, the party filing the lien, and the timing of actions in the lien process.

If a contractor has placed a mechanic’s lien on your property, and you believe this to be an error, a Dayton, OH, real estate lawyer can examine the lien and advise you on how to respond.

Talk to a Columbus, OH, Real Estate Lawyer Today 

Kohl & Cook Law Firm, LLC, helps Ohio residents with real estate transactions. Call our Columbus real estate lawyers today to schedule an appointment, and we can begin discussing your next steps right away.