Laws regarding liens are governed by the states, so the procedures for creating liens will be different in every state. The laws will be enforced by the county in which the property is located.
A labor lien allows someone who has worked on a building but has not been paid, to put a lien on the property for the amount owed for the labor. This applies to construction of both residential and commercial buildings. The property owner cannot sell the property without resolving the lien. Traditionally, people who only provided labor in the form of professional services for a construction project, like engineers and architects, could not file a labor lien on the property. This has changed in some states. (Reference 1)
There are two types of liens put on buildings: labor liens and materialman's liens. People who do the actual labor, like carpenters, electricians, plumbers, painters, and roofers, place labor liens on property. People who supply material like lumber, shingles, and plumbing supplies, can put materialman's liens on the property. The procedures for placing these liens may or may not be the same, depending on state law. (See Reference 2.) You must be sure to file the right kind of lien, depending on whether you supplied labor or materials.
The procedure for creating a labor lien is different for every state. You usually must begin by giving notice to the property owner that you intend to file the lien. Your state law will say how you need to give this notice, such as by registered mail. If the property owner does not pay the amount due, you can then file the lien by filling out the paper(s) required in the county where the property is located. The paper needed may be an affidavit or a county form. Contact the county office where deeds are filed to find out the proper forms and procedure for filing a lien in your state. This office will have a name like Register of Deeds.
Many state laws have specific time frames for creating a lien. For example, you may have only 60 days from the date you finished work to notify the property owner that you intend to file a lien and only six months from then to file the lien with the county. There may also be a limit on the time you have to file a lawsuit to foreclose on the property. If you do not comply with these timelines you will not be able to collect on your claim, so you should find out the time frame in your state as soon as possible after you finish the work. These timelines can be found in the statutes of the state where the property is located. State statutes are often available online and are also available at your local law library. The county office for deed registrations may have copies of the statutes relating to liens.
Once a lien is successfully made against a property, the owner must resolve the lien before the property can change hands. If the lien is not paid, the lienholder can bring a legal action to collect it. The court can force the sale of the property to pay the lien.
Property owners can prevent liens from being filed against their property by requiring the contractor to get releases of liens from every person who provided labor or materials for a project. These releases should be obtained before the contractor is given the final payment. (See Reference 1.)