The purpose of every construction lien is to secure payment. But, there are times when there are no funds to pay lien claimants. In these situations, lien claimants may have to enforce their lien, which can mean having to file a lawsuit, obtain a specific type of judgment, and sell the property to which the lien attaches at a public auction.
The first step in this process is to foreclose the lien. From the date of recording, a lien claimant has eight months to foreclose its lien. If the lien claimant does not do this, the lien dies. The lien claimant can only foreclose the lien in the county where the property is located. No other counties have jurisdiction over lien foreclosure proceedings.
If the lien claimant foreclosed on time, the lien claimant will then have to acquire a judgment. This requires the lien claimant to prove that the lien is valid and that the lien claimant is entitled to recover the amount stated on the lien. If the lien claimant prevails in the lawsuit, the lien claimant’s judgment will need to include specific language stating that the lien is foreclosed and that the property is to be sold to satisfy the lien. Without this language, the lien claimant’s judgment will not force the sale of the property.
After getting a judgment with the appropriate language, a lien claimant will need to take that judgment to the sheriff. The sheriff will then go through the auction process, which includes setting an auction date and providing notice that the property will be sold at public auction, and selling the property at the auction. The proceeds from the auction will go to pay off the lien, any incurred costs and fees the lien claimant spent to foreclose its lien, and other encumbrances on the property, if any.
Foreclosing on a construction lien and selling the property at public auction can be a complicated and lengthy process. It is always best to contact an experienced attorney to ensure that the foreclosure and property sale proceed smoothly. We at Levy׀ von Beck ׀ Comstock have over 30 years in combined experience foreclosing liens on behalf of our material supplier, subcontractor, and general contractor clients. Please contact attorney Seth Chastain if you are interested in foreclosing a lien.