This is the first in a series of blog posts discussing lien requirements in states where we most frequently litigate and states with unique lien requirements. If you have any questions about filing liens, discharging or bonding off liens, or other lien requirements in these or other states, please do not hesitate to contact Aman Kahlon.
Link to Alabama Lien Law Basics Alabama Lien Law Basics
Alabama’s statutory mechanic’s lien law can be found at Ala. Code §§ 35-11-210 et seq. These statutory lien requirements are strictly enforced. Some basic precepts of Alabama lien law include:
- In Alabama, a mechanic’s lien claim can only arise out of a contract for performing work or furnishing materials for construction or repair of a building or improvement upon land. Clearing, grading, and excavation work, for example, constitute improvements to land. Additionally, architects or engineers who provide plans and supervise erection are also entitled to lien construction projects.
- A general or original contractor has the right to lien the full amount of its contract with an owner (a full price lien).
- Subcontractors, suppliers, and other materialmen not in privity with an owner typically are entitled to lien only on the unpaid balance due from the owner to the original contractor. But see § 35-11-210 (permitting full price lien rights for certain materialmen (not supplying labor or services) when notice provided to owner prior to furnishing materials)).
- Upon request of an owner, an original contractor shall furnish a complete list of all materialmen, laborers, and employees who have furnished any material or are under contract to furnish material or labor for a project, along with the terms and prices thereof (Ala. Code § 35-11-219). If an original contractor fails to supply such information or fails to pay any materialman, subcontractor, or laborer, the contractor may forfeit its lien rights against the owner.
- Notice of an intent to file an unpaid balance lien (Ala. Code § 35-11-218) must be given to the owner prior to filing or recording a lien. The notice must be in writing, state that a lien is claimed, set forth the amount due, set forth the work performed, and describe the entity or person who owes the money. Original contractors are not required to submit this notice.
- A verified statement of lien must be filed with the probate court in the county or counties where the property for the project is situated (a) within six months after the last item of work has been performed or the last item of material has been furnished for original contractors, (b) within 30 days after the last item of work has been furnished for laborers, or (c) within four months for all other entities after the last item of work or material has been furnished. For (b) and (c), the verified statement of lien must follow the notice of intent required under Ala. Code § 35-11-218.
- Following filing of a verified statement of lien, a party seeking to enforce its lien rights must file suit within six months after maturity of the entire indebtedness (usually the date when labor was last performed or materials were last furnished on a job).
- To bond off a lien filed against your project, Alabama law requires the bond to cover the amount of the lien, plus interest on that amount at 8% for three years and $100 for court costs (Ala. Code § 35-11-233). If you are seeking to bond off a lien prior to an enforcement action being filed, a trip to the local probate court may be required.
Stay tuned for additional primers on lien laws in other states.