In Indiana, a party can file a mechanic’s lien if they performed work or provided materials to repair or maintain a real property, and the property owner has not compensated them. The party should file the lien at the office of the county recorder. They must file a civil lawsuit to enforce the lien within one year from the date that the county recorder’s office received the lien for recording.
Time Requirement for Lien
A party who wants to file a lien must file, in duplicate, a sworn statement and notice of their intention to hold a lien on the property in the amount of their claim. They must file the statement and notice of intention in the county recorder’s office not less than 90 days after performing labor or furnishing material or machinery. As to a Class 2 structure such as a townhouse, the person who wants to file the lien must do so not later than 60 days after performing labor or furnishing material or machinery.
What an Indiana Mechanic’s Lien Contains
Under Indiana law, a mechanic’s lien should contain:
- Name and complete address of the party owed money.
- Name and complete address of the owner of the property.
- Legal description of the property.
- Notarized signatures of the parties filing the lien.
- Address of the property.
- Affirmation statement.
The names of all parties must be printed or typed under their signatures.
The persons owed money must make copies of the lien for mailing. The fee to file is $25 with a first-class mailing and $2.00 per each additional mailing. The county recorder will mail by first-class one copy of the statement and notice of intention to hold a lien to the owner of the property not later than three business days after the recording.
The recorder will also post records as to the date of the mailing and collect a $2 fee from the lien claimant for each statement and notice mailed. The statement and notice will be sent to the party or parties named in the sworn statement and notice as the owner.
Parties to Be Compensated
Individuals who can file a mechanic’s lien for a construction project include:
- Lessor of construction and other equipment and tools.
- Other persons performing labor or providing materials or machinery, including the leasing of equipment or tools.
A mechanic’s lien can be instituted on property including: house, mill, center of manufacturing operations, buildings, bridge, reservoir, system of waterworks, walk, sidewalk, stile, well, drain, drainage ditch, sewer, cistern or earth-moving operations. An individual may have a lien separately or jointly on the properties and features.
Contract to Disallow Lien Claim
The owner and principal contractor can enter into a contract to prohibit the filing of a lien on the real estate, building, structure or other improvement of the homeowner. A contract to disallow a lien must:
- Be in writing.
- Contain legal description of the real property to be improved.
- Be acknowledged as provided with regard to deeds.
- Be filed and recorded in the county recorder’s office of the county in which the real property is situated, not more than five days after the day the contract was executed.
A construction contract containing a provision that disallows a lien to attach to real estate will not affect a lien for labor, material or machinery that was filed before the contract was filed with the recorder’s office.
When Property Is Mortgaged
The entire land upon which the work was done is subject to a lien. If the land, property or feature that the mechanic works on is leased or mortgaged, the lien is not impaired by the forfeiture of the lease or the foreclosure of the mortgage. The owner may sell the buildings to satisfy the lien. If the property is sold, the purchaser may remove the lien not less than 90 days after the sale.
Priorities of Liens
A lender can be an individual, supervised financial organization, insurer, pension fund or other entity with the authority to make loans. If there are two liens, the lien recorded first has priority over any lien created after it. The lien of a mechanic or materials supplier does not have priority over the lien of another mechanic or materials supplier.
The mortgage of a lender has priority over all liens recorded after the date the mortgage was recorded. This is true to the extent of the funds actually owed to the lender for the project to which the lien rights relate.
This does not apply to a lien that relates to a contract for the development, construction, alteration or repair of a Class 2 structure, a townhouse or an outbuilding like a garage or barn, or a swimming pool. These statements do not apply to a lien on improvements on real estate auxiliary to a Class 2 structure.
Credits and Extension of Lien
If a mechanic’s lien is not enforced within one year of the date of the recording of the statement and notice of intention, it is void. A credit does not extend the time limit to file an action to enforce the lien. The exception to this rule occurs when the:
- Terms of the credit are in writing.
- Credit was executed by the lien holder and all owners of record.
- Credit was recorded in the same manner as the original statement and notice of intention to hold a lien.
- Credit was recorded not later than one year after the recording of the statement and notice of intention to hold a lien.
If the lien was foreclosed, the court shall order the property to be sold subject to the lien. The sale of the property may not prejudice the rights of a prior encumbrance or an owner or other person who is not a party to the action.
If several actions are brought by different claimants against the same property and are pending at the same time, the court may consolidate the actions. If the proceeds of the foreclosure sale are insufficient to pay all the claimants, the court will order the claimants to be paid in proportion to the amount due each claimant.
- Hendricks County, Indiana: Recorder's Office
- Indiana Code: Section 32-28-3 Mechanic's Liens
- Indiana Code: Section 22-12-1-5 Class 2 Structure
- Hendricks County, Indiana: Mechanic's Lien
- City of Evansville, Indiana: Sworn Statement and Notice of Intention to Hold Mechanic's Lien
- Indiana Code: Section 32-28-7 Actions to Foreclose or Enforce
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.