Construction projects come in all shapes and sizes. But did you know that in some jurisdictions, the size of your project can dictate whether or not you have rights to file a mechanic’s lien? Maryland is one such state.
The Maryland Mechanic’s Lien Law provides lien rights for those who provide labor and materials to a construction project. However, the rights vary depending on whether the project is new construction or repairs or renovations to an existing structure. If the project involves an existing structure, the value of the contractor’s work must exceed 15% of the value of the building. If the project is new construction, this requirement does not apply. Furthermore, if the mechanic’s lien is being placed on a leasehold interest, the value of the work must exceed 25% of the building’s value. In light of the above, the value of the project and the value of the building should be determined before filing a mechanic’s lien lawsuit.
The above thresholds are certainly daunting for subcontractors, who have smaller claims than their general contractors. However, there is some relief for subcontractors: Maryland courts allow subcontractors to use the entire value of the project when filing for a mechanic’s lien. If the entire project value meets the required value percentage, a smaller subcontractor can still file a mechanic’s lien.
If you have any questions about this topic or any other construction law issue, please contact Brian Loffredo at
ABOUT BRIAN LOFFREDO
Brian is a commercial litigator with more than seventeen years of experience representing clients in the franchise industry. Brian routinely assists clients during the licensing and franchise/FDD review process, as well as with the resolution of franchise-related disputes, including those involving terminations, territorial disputes, fraud, disclosure/relationship law violations and breaches of contract.
In addition, Brian represents and counsels clients in the construction industry on matters involving litigation, construction defects, licensing and compliance, collections, mechanic’s liens, payment bond and Miller Act claims, contract drafting, and compliance with home improvement laws and other construction industry laws.
Brian also has extensive experience representing financial institutions with workouts, collections and residential / commercial foreclosures.
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