Oklahoma Lien Laws--A Primer.

Introduction

Mechanics and materialmen's liens, often referred to as "M&M liens," exist to protect those whose labor or materials are used to improve the value of real property. [1] Created by statute, liens are strictly construed in determining whether or not a lien exists -- meaning the filer must bring himself clearly within the scope of persons, to be protected by the lien statute; once the filer establishes he is protected by the lien law, the law is broadly construed with regard to the protection afforded to the lien claimant. [2] In the construction field, M&M liens afford an additional measure of protection for goods sold for a specific job. Since these liens are creatures of statute, there must be strict compliance with the filing requirements of the statute creating the lien. Accordingly, let's take a look at the basics for filing an M&M lien in Oklahoma.

Deadline summary

To assert an M&M lien in Oklahoma, one must file a lien within 90 days after last providing labor or materials; no prefiling notice is required on construction jobs except (i) for leased or rented equipment, or (ii) for jobs involving occupied homes.

M&M liens provide leverage and security.

A lien is a charge against property, which secures the claim of the holder of the lien. Without a lien, the claimant is merely a general unsecured creditor, who must first sue and obtain a judgment from a court before seeking to collect from any specific property. With a lien the claimant has potential security in the value of the liened property (subject only to such other liens, mortgages or security interests which may exist against the specific property); if not paid, the claimant may foreclose against the liened property. The financial statements of many contractors and subcontractors are highly leveraged; a lien allows the claimant to assert a specific charge against the property being improved, in addition to the general claim against the owner, contractor or subcontractor. Because notice is given to the property owner and general contractor when a lien is filed, a lien also provides the claimant with leverage, as one of those parties may pay the lien off or, at minimum, exert additional pressure on the defaulting party (perhaps by withholding retainage) to pay the lien claim.

Who is eligible to file a lien?