Unconditional Waiver and Release Upon Progress Payment - Corporation or LLC
Note: This summary is not intended
to be an all-inclusive discussion of Maryland's construction or mechanic's
lien laws, but does include basic provisions.
What is a construction or mechanic's lien?
Every state permits
a person who supplies labor or materials for a construction project to
claim a lien against the improved property. While some states differ
in their definition of improvements and some states limit lien claims to
buildings or structures, most permit the filing of a document with the
local court that puts parties interested in the property on notice that
the party asserting the lien has a claim. States differ widely in
the method and time within which a party may act on their lien. Also
varying widely are the requirements of written notices between property
owners, contractors, subcontractors and laborers, and in some cases lending
institutions. As a general rule, these statutes serve to prevent
unpleasant surprises by compelling parties who wish to assert their legal
rights to put all parties who might be interested in the property on notice
of a claim or the possibility of a claim. This by no means constitutes
a complete discussion of construction lien law and should not be interpreted
as such. Parties seeking to know more about construction laws in
their state should always consult their state statutes directly.
Who can claim a lien in this state?
Maryland law is unusual
in that it provides that a party cannot have a lien against property until
a suit is filed, a hearing held, and a judge orders that a lien be placed.
Parties that can begin the process include parties that work on a building
that has been erected, repaired, rebuilt, or improved to the extent of
15% of its value. Also, waterlines, sewers, drains, and street developments
may be subject to liens, as well as machines, wharves, and bridges.
However, "...a building or the land on which the building is erected may
not be subjected to a lien under this subtitle if, prior to the establishment
of a lien in accordance with this subtitle, legal title has been granted
to a bona fide purchaser for value." Md. Code. Ann. Real Property
9-102.
How long does a party have to claim a lien?
A party seeking to claim
a lien must file a petition in the circuit court within one hundred eighty
(180) days after the work has been finished or materials furnished. Md.
Code. Ann. Real Property 9-105.
What kind of notice is required prior to claiming
a lien?
A subcontractor seeking to clam a lien is required to provide written notice
of his intent to claim a lien within one hundred twenty (120) days after
doing the work or furnishing the materials. Md. Code. Ann.
Real Property 9-104.
By what method is a lien filed in this state?
Maryland law requires
the filing of a petition for lien before the Circuit court of the county
in which the property is situated. A hearing must be held and parties
in interest given the opportunity to respond.
How long is a lien good for?
The right to enforce
any lien under Maryland law expires at the end of one year from the day
on which the petition to establish the lien was first filed. Md.
Code. Ann. Real Property 9-109.
Are liens assignable?
Any party classified
as a 'vendor' for purposes of Maryland's statutes may assign a lien in
the same manner prescribed for the assignment or release of a mortgage.
Md. Code. Ann. Real Property 7-204.
Does this state require or provide for a notice
from contractors and subcontractors to property owners?
Only to the extent a
subcontractor is required to provide a notice of intent to claim a lien.
The notice must be provided within one hundred twenty (120) days from of
the last date of work furnished. Md. Code. Ann. Real Property 9-104.
Does this state permit a person with an interest
in property to deny responsibility for improvements?
No. Although some
states allow a party with an interest in the property to deny responsibility,
Maryland law does not contain such a provision.
Is a notice attesting to the satisfaction of a
lien provided for or required?
No. Maryland's
statutes do not provide or require a written notice of the satisfaction
of a lien.
By what method does the law of this state permit
the release of a lien?
Maryland's statutes
have no specific provision for the release of a lien other than by expiration
of the statute of limitations after one year from the date of the filing
of a petition to establish a lien.
